# Delcath Systems, Inc.: Form 10-Q for the period ended Sep 30, 2024 - Company: [Delcath Systems, Inc.](/companies/dcth.md) (CIK 872912) - Form: 10-Q - Filed: 2024-11-08 - Accepted by EDGAR: Nov 8, 2024, 09:46 ET - Period: 2024-09-30 - Accession: 0001628280-24-046537 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/872912/000162828024046537/dcth-20240930.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/872912/000162828024046537/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2024-09-30. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 3 months, 2024-07-01 to 2024-09-30 | $11.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Revenue | 9 months, 2024-01-01 to 2024-09-30 | $22.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $1.6m | us-gaap:CostOfRevenue | | Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $4.1m | us-gaap:CostOfRevenue | | Gross profit | 3 months, 2024-07-01 to 2024-09-30 | $9.6m | us-gaap:GrossProfit | | Gross profit | 9 months, 2024-01-01 to 2024-09-30 | $18.0m | us-gaap:GrossProfit | | Research and development | 3 months, 2024-07-01 to 2024-09-30 | $3.9m | us-gaap:ResearchAndDevelopmentExpense | | Research and development | 9 months, 2024-01-01 to 2024-09-30 | $11.0m | us-gaap:ResearchAndDevelopmentExpense | | Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $7.0m | us-gaap:SellingGeneralAndAdministrativeExpense | | Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $22.5m | us-gaap:SellingGeneralAndAdministrativeExpense | | Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$1.3m | us-gaap:OperatingIncomeLoss | | Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$15.4m | us-gaap:OperatingIncomeLoss | | Net income | 3 months, 2024-07-01 to 2024-09-30 | $1.9m | us-gaap:NetIncomeLoss | | Net income | 9 months, 2024-01-01 to 2024-09-30 | −$23.0m | us-gaap:NetIncomeLoss | | Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.06 | us-gaap:EarningsPerShareDiluted | | Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.84 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.06 | us-gaap:EarningsPerShareBasic | | Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.84 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 32,345,672 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 27,335,212 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$17.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $330.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | | Cash and equivalents | at 2024-09-30 | $8.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2024-09-30 | $28.9m | us-gaap:AssetsCurrent | | Total assets | at 2024-09-30 | $31.7m | us-gaap:Assets | | Current liabilities | at 2024-09-30 | $21.6m | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2024-09-30 | $23.1m | us-gaap:Liabilities | | Long-term debt | at 2024-09-30 | $2.0m | us-gaap:LongTermDebt | | Shareholders' equity | at 2024-09-30 | $8.6m | us-gaap:StockholdersEquity | ## Management's discussion and analysis As filed, 27,656 characters. *The following discussion and analysis of the financial condition and results of operations of Delcath Systems, Inc. (“Delcath” or the “Company”) should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto contained in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report”), which was filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2024, to provide an understanding of its results of operations, financial condition and cash flows.* *All references in this Quarterly Report on Form 10-Q to “we,” “our,” “us” and the “Company” refer to Delcath Systems, Inc., and its subsidiaries unless the context indicates otherwise.* *This Quarterly Report on Form 10-Q and may include trademarks, service marks and trade names owned or licensed by us, including CHEMOFUSE, CHEMOSAT, CHEMOSATURATION, DELCATH, HEPZATO, HEPZATO KIT, PHP and THE DELCATH PHP SYSTEM. Solely for convenience and readability, trademarks, service marks and trade names, including logos, artwork and other visual displays, may appear in a non-traditional trademark usage manner, including without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names. All trademarks, service marks and trade names included in this Quarterly Report on Form 10-Q are the property of the Company or the Company’s licensor, as applicable.* ### Disclosure Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 with respect to our business, financial condition, liquidity, and results of operations. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should,” and the negative of these terms or other comparable terminology often identify forward-looking statements. Statements in this Quarterly Report on Form 10-Q that are not historical facts are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risks discussed in Item 3 “Quantitative and Qualitative Disclosures About Market Risk,” and the risks discussed in Part II, Item 1A under “Risk Factors” and the risks detailed from time to time in our future reports filed with the SEC. These forward-looking statements include, but are not limited to, statements about: - our estimates regarding sufficiency of our cash resources, anticipated capital requirements, future revenue and our need for additional financing; - the commencement of future clinical trials, if any, and the results and timing of those clinical trials; - our expectations that the publication of additional data from our Phase 3 FOCUS Trial will support increased clinical adoption of and reimbursement for CHEMOSAT in Europe, and support reimbursement in various jurisdictions, including the United States; - our ability to successfully commercialize CHEMOSAT, HEPZATO KIT, and future products, if any, generate revenue and successfully obtain reimbursement for the products and/or the associated procedures; - our sales, marketing and distribution capabilities and strategies, including for the commercialization and manufacturing of CHEMOSAT, HEPZATO KIT, and future products, if any; - the rate and degree of market acceptance and clinical utility of CHEMOSAT, HEPZATO KIT, and future products, if any; - developments relating to our competitors and our industry; - the initiation and success of our research and development programs; - submission and timing of applications for regulatory approval and approval thereof; - our ability to successfully source components of CHEMOSAT, HEPZATO KIT, and future products, if any, and enter into supplier contracts; - our ability to source melphalan and other critical components necessary to manufacture HEPZATO KIT; - our ability to successfully manufacture CHEMOSAT and HEPZATO KIT; - our ability to successfully negotiate and enter into agreements with distribution, strategic and corporate partners; and - our estimates of potential market opportunities and our ability to successfully realize these opportunities. Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as otherwise required by law, we do not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events. ### Company Overview We are an interventional oncology company focused on the treatment of primary cancers metastatic to the liver. Our lead product, the HEPZATO KIT (melphalan for Injection/Hepatic Delivery System), a drug/device combination product, was approved by the US Food and Drug Administration (the “FDA”) on August 14, 2023, indicated as a liver-directed treatment for adult patients with uveal melanoma with unresectable hepatic metastases affecting less than 50% of the liver and no extrahepatic disease, or extrahepatic disease limited to the bone, lymph nodes, subcutaneous tissues, or lung that is amenable to resection, or radiation. The first commercial use of the HEPZATO KIT for the treatment of metastatic hepatic dominant uveal melanoma (“mUM”) took place in January 2024. In the United States, HEPZATO is considered a combination drug and device product and is regulated as a drug by 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 us 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). We have sufficient raw material and component constituent parts of the HEPZATO KIT to meet anticipated demand and we intend to manage supply chain risk through stockpiled inventory and contracting with multiple suppliers for critical components. As of October 31, 2024, 12 facilities have treated at least one patient with the HEPZATO KIT. 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 in the liver. On February 28, 2022, CHEMOSAT received Medical Device Regulation (MDR) certification under the European Medical Devices Regulation (EU)2017/745, which may be considered by jurisdictions when evaluating reimbursement. As of March 1, 2022, we have assumed direct responsibility for sales, marketing and distribution of CHEMOSAT in Europe. Our clinical development program for HEPZATO was comprised of the FOCUS Clinical Trial for Patients with metastatic hepatic dominant Uveal Melanoma (the “FOCUS Trial”), a global registration clinical trial that investigated objective response rate in patients with mUM. The current focus of our clinical development program is to generate clinical data for CHEMOSAT and HEPZATO in patients with mUM, either as monotherapy or in combination with immunotherapy. On May 6, 2024, we announced the publication of results from our Phase 3 FOCUS Trial, including an Overall Response Rate (“ORR”) of 36.35, which included 7.7% of patients with Complete Response, as determined by an Independent Review Committee. An ORR of 36.3% in the FOCUS study was statistically significantly better than the pooled ORR estimate (a weighted mean of the observed ORR) of 5.5% in the historical control group. We expect that the publication will support increased clinical adoption of and reimbursement for CHEMOSAT in Europe, and support reimbursement in various jurisdictions, including the United States. In addition to HEPZATO’s use to treat mUM, the Company believes that HEPZATO has the potential to treat other cancers in the liver, such as metastatic colorectal cancer, metastatic neuroendocrine tumors, metastatic breast cancer and intrahepatic cholangiocarcinoma, and plans to begin one or more studies of the HEPZATO KIT to treat such conditions in late 2024 or early 2025. We believe that those and similar disease states are areas of unmet medical needs that represent significant market opportunities. ### Results of Operations *(In thousands)* | | Three months ended September 30, 2024 | 2023 | Nine months ended September 30, 2024 | 2023 | | --- | ---: | ---: | ---: | ---: | | Total revenues | $11,200 | $434 | $22,105 | $1,526 | | Cost of goods sold | (1,640) | (133) | (4,062) | (464) | | Gross profit | 9,560 | 301 | 18,043 | 1,062 | | Research and development expenses | 3,866 | 4,662 | 10,960 | 12,793 | | Selling, general and administrative expenses | 6,953 | 6,195 | 22,532 | 15,147 | | Total operating expenses | 10,819 | 10,857 | 33,492 | 27,940 | | Operating loss | (1,259) | (10,556) | (15,449) | (26,878) | | Interest and other income (expense) | 3,123 | (9,784) | (7,539) | (9,664) | | Net income (loss) | $1,864 | $(20,340) | $(22,988) | $(36,542) | #### Revenue The increase in total revenue for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was due to the commercial launch of the HEPZATO KIT in the U.S. during the first quarter of 2024 and the commercial expansion since such time along with an increase in demand for CHEMOSAT in Europe. #### Cost of Goods Sold The change in cost of goods sold for the three and nine months ended September 30, 2024 compared to the same periods in 2023 is directly related to changes in demand for product revenue. #### Research and Development Expenses Research and development expenses are incurred for the development of HEPZATO and consist primarily of payroll and payments to contract research and development companies. In 2023, these costs primarily related to generating pre-clinical data submission of the NDA and the cost of manufacturing HEPZATO for expanded access program sites utilizing the HEPZATO KIT prior to FDA approval. The decrease for the three and nine months ended September 30, 2024 compared to the same period in 2023 is due to lower costs associated with NDA submission and expanded access program costs offset by an increase in medical affairs and regulatory costs associated with an approved product. #### Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of payroll, rent and professional services such as accounting, legal, marketing and commercial preparation services. For the three and nine months ended September 30, 2024 compared to the same periods in 2023, selling, general and administrative expenses increased due to commercial launch activities including marketing-related expenses and additional personnel in the commercial team. #### Interest and other Income/Expense Interest and other income (expense) in 2024 is primarily related to the change in fair value of the Tranche B Warrants liability, interest income associated with marketable securities which is then offset by interest expense related to our debt instruments. There was a decrease in interest expense for the three and nine months ended September 30, 2024 compared to the same periods in 2023 related to the principal loan payments made during 2023 and 2024. A decrease in warrant valuation occurred during the three months ended September 30, 2024 due to the decrease in expected term of the outstanding Tranche B Warrants. ### Liquidity and Capital Resources At September 30, 2024, we had cash and cash equivalents totaling $8.3 million and short-term investments totaling $5.7 million, as compared to cash, cash equivalents and restricted cash totaling $12.7 million and short-term investments totaling $19.8 million at December 31, 2023. During the nine months ended September 30, 2024, we used $17.7 million of cash for operating activities compared to $23.1 million during the nine months ended September 30, 2023, and $8.6 million for principal payments during the nine months ended September 30, 2024, compared to $6.3 million for principal payments during the nine months ended September 30, 2023. At September 30, 2023, we had cash, cash equivalents and restricted cash totaling $40.5 million. Our future results are subject to substantial risks and uncertainties. We have operated at a loss for our entire history and there can be no assurance that we will ever achieve or maintain profitability. We have historically funded our operations primarily with proceeds from sales of common stock, warrants and pre-funded 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. ### Funding Requirements If there is a substantial delay in the activation of additional sites to administer HEPZATO and/or the revenue generated from HEPZATO and CHEMOSAT is less than anticipated, 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 substantially delayed site activation scenario, we will not have sufficient funds to meet our obligations within twelve months from the issuance date of these condensed consolidated financial statements. As such, there is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs for product candidates and/or grant licenses on terms that may not be favorable to us, any of which may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates to third parties even if we would otherwise prefer to develop and market such product candidates ourselves. We also expect to use cash and cash equivalents to fund activities relating to commercial support for HEPZATO, CHEMOSAT and any future clinical research trials and operating activities. Our future liquidity and capital requirements will depend on numerous factors, including our ability to successfully commercialize HEPZATO and CHEMOSAT; the cost of and our ability to obtain additional regulatory approvals for HEPZATO and CHEMOSAT in additional jurisdictions and for additional indications; our ability to build a commercial infrastructure for HEPZATO for the treatment of mUM in the United States; obtaining regulatory approvals and complying with applicable laws and regulations; the timing and effectiveness of product commercialization activities, including marketing arrangements; our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure; the timing and costs involved in preparing, filing, prosecuting, defending and enforcing intellectual property rights; the resolution of any disputes with third parties; and the effect of competing technological and market developments. ### Capital Commitments Our capital commitments over the next twelve months include (a) $6.8 million to satisfy accounts payable, accrued expenses, current lease liabilities and current medac settlement and (b) $2.0 million of convertible note principal payments, if the holders do not elect to convert the notes into equity. Additional capital commitments beyond the next twelve months include (a) $1.3 million of lease liabilities and (b) $0.6 million for settlement of litigation with medac. ### Source of Liquidity #### June 2024 Shelf Registration Statement On June 28, 2024, we filed a universal shelf registration statement on Form S-3 (the “June 2024 Shelf Registration Statement”) with the SEC, pursuant to which we may offer, issue and sell any combination of shares of our common stock, par value $0.01 per share, shares of our preferred stock, par value $0.01 per share, debt securities, warrants to purchase common stock, preferred stock and/or debt securities, in one or more series, and units consisting of any combination of the other types of securities registered under such June 2024 Shelf Registration Statement in an aggregate amount of up to $150 million, in each case, to the public in one or more registered offerings. #### At-the-Market Offering We previously entered into a Controlled Equity OfferingSM Sales Agreement (“ATM Sales Agreement”), with Cantor Fitzgerald & Co. (the “Sales Agent”), pursuant to which we may offer and sell, at our sole discretion through the Sales Agent, shares of our common stock from time to time. Pursuant to a prospectus supplement (the “ATM Prospectus Supplement”), filed with the SEC on February 27, 2023, we could sell shares of common stock under the ATM Sales Agreement up to an aggregate of $17.0 million. To date, we have sold approximately $4.0 million of our common stock, prior to issuance costs, under the ATM Sales Agreement. No sales were made during the three and nine months ended September 30, 2024. The registration statement the ATM Prospectus Supplement was a part of, expired on July 1, 2024 and we can no longer make sales under the ATM Prospectus Supplement. #### Avenue Loan Agreement On August 6, 2021, we entered into the Avenue Loan Agreement with Avenue Venture Opportunities Fund, L.P. (the “Lender,” or “Avenue”), as amended on March 31, 2023, for a term loan in an aggregate principal amount of up to $20 million (the “Avenue Loan”). The Avenue Loan bore 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 September 30, 2024 was 16.20%. The Avenue Loan was secured by all of our assets globally, including intellectual property. On March 15, 2023, we returned to Avenue $4.0 million held in the restricted cash to pay down a portion of the outstanding loan balance, principal payments of $2.1 million and an incremental 4.25% of the final payment of $0.2 million. On March 31, 2023, we reached an agreement to amend the existing loan agreement with Avenue to defer the interest only period to September 30, 2023, with an additional extension option upon the FDA approval for the HEPZATO KIT and subsequent receipt of at least $10 million from the sale and issuance of equity securities. In exchange for this extension, we agreed to provide Avenue with 34,072 warrants to purchase shares of common stock at an exercise price of $0.01 per warrant share, all of which were exercised in April 2024. On August 14, 2023, we received the FDA approval for the HEPZATO KIT and subsequently received over $10 million from the exercise of warrants. At our option, we elected to extend the interest only period to December 31, 2023. Principal payments of approximately $1.0 million began in January 2024. Avenue did not exercise its option to convert the remaining principal amount of the Avenue Loan into shares of our common stock and on August 1, 2024, upon maturity of the Avenue loan, we made the final payment due there under. Avenue has released us from all obligations and returned all security interests back to us. #### Series E and Series E-1 Warrants In June and July 2019, we entered into definitive securities purchase agreements with certain investors pursuant to which we issued shares of common stock and Series E and Series E-1 Warrants to purchase shares of common stock. The Series E and Series E-1 Warrants have an exercise price of $10.00 per share and expire on December 24, 2024. No Series E and Series E-1 Warrants were exercised during the three and nine months ended September 30, 2024. As of September 30, 2024, 1,758,843 of such warrants remain outstanding. #### Series F Warrants In May 2020, we completed an underwritten public offering consisting of shares of common stock, Series F warrants to purchase shares of common stock and, to certain investors, in lieu of shares of common stock, pre-funded warrants to purchase shares of common stock. The Series F Warrants have an exercise price of $10.00 per share of common stock and expire on May 5, 2025, while the pre-funded warrants issued in such offering have an exercise price of $0.01, if exercised via cash payment. No Series F Warrants were exercised during the three and nine months ended September 30, 2024. As of September 30, 2024, 1,851,900 of the Series F Warrants remain outstanding. #### March 2023 Private Placement On March 27, 2023, we entered into a securities purchase agreement with certain accredited investors (the “Preferred Purchase Agreement”), pursuant to which we agreed to issue and sell, in a private placement (the “Series F Preferred Offering”), (i) 24,900 shares of our Series F-1 Convertible Preferred Stock, par value $0.01 per share (the “Series F-1 Preferred Stock”), (ii) tranche A warrants (the “Preferred Tranche A Warrant”) to acquire 34,859 shares of Series F-3 Convertible Preferred Stock, par value $0.01 per share (the “Series F-3 Preferred Stock”) and (iii) tranche B warrants (the “Preferred Tranche B Warrant,” together with the Preferred Tranche A Warrant, the “Preferred Warrants”) to acquire 24,900 shares of Series F-4 Convertible Preferred Stock, par value $0.01 per share (the “Series F-4 Preferred Stock”) for an aggregate offering price of $24.9 million before deducting the fees paid to the placement agent and the financial advisors and other financing expenses payable by us. Also on March 27, 2023, we entered into a securities purchase agreement with the our Chief Executive Officer, Gerard Michel, pursuant to which we agreed to issue and sell, in a private placement (the “Common Offering”, and together with the Series F Preferred Offering, the “Private Placements”), (i) 19,646 shares of common stock, (ii) tranche A warrants to acquire 31,110 shares of common stock (the “Common Tranche A Warrants”, and together with the Preferred Tranche A Warrants, the “Tranche A Warrants”) and (iii) tranche B warrants to acquire 16,666 shares of common stock (the “Common Tranche B Warrants”, and together with the Preferred Tranche B Warrants, the “Tranche B Warrants”) for an approximate aggregate offering price of $0.1 million. On June 12, 2023, the stockholders approved the Private Placements at the annual general meeting of stockholders and therefore, the Preferred Warrants and Common Warrants issued in the Private Placements became exercisable. The exercise of all such Preferred Warrants and Common Warrants would generate approximately $60.0 million in proceeds to us. As of September 30, 2024, all of the Preferred Tranche A Warrants were exercised for an aggregate exercise price of $34.9 million into 34,859 shares of Series F-3 Preferred Stock, which were subsequently converted into shares of common stock in accordance with the terms of the Certificate of Designation and Rights relating to the Series F Preferred Offering, 250 shares Preferred Tranche B Warrants were exercised for an aggregate exercise price of $0.3 million into 250 shares of Series F-3 Preferred Stock, which were subsequently converted into shares of common stock in accordance with the terms of the Certificate of Designation and Rights relating to the Series F Preferred Offering, and all of the Common Tranche A Warrants were exercised for an aggregate exercise price of $0.1 million into 31,110 shares of common stock. During the quarter ending September 30, 2024, we recorded at least $10.0 million in quarterly U.S. revenue due to the commercialization of the HEPZATO KIT which was announced by us on October 17, 2024, triggering the 21 day exercise period. As of November 5, 2024, 24,900 Preferred Tranche B Warrants and 16,666 Common Tranche B Warrants were exercised by the November 6, 2024 expiration date which resulted in $25 million of cash proceeds to us. As of September 30, 2024, 58,924 shares of our Series F-1, F-2, F-3 and F-4 Preferred Stock were converted into 15,005,211 shares of common stock. #### March 2024 Private Placement On March 14, 2024, we and certain accredited investors (each an “Investor” and collectively, the “Investors”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which we agreed to sell and issue to the Investors in a private placement (the “Private Placement”) (i) an aggregate of 876,627 shares of the Company’s common stock, par value $0.01 per share, at a purchase price of $3.72 per share, and (ii) to certain investors, in lieu of shares of common stock, 1,008,102 pre-funded warrants (the “Pre-Funded Warrants”) at a price per Pre-Funded Warrant of $3.71 (the “Warrant Shares” and together with the Shares, the “Securities”) with an exercise price of $0.01. As of September 30, 2024 the Pre-Funded Warrants have been exercised in full. The Private Placement closed on March 19, 2024. We received gross proceeds of approximately $7.0 million, before deducting offering expenses payable by us. ### Critical Accounting Estimates There have been no material changes to the process of our critical accounting estimates as they were reported in our Annual Report on Form 10-K filed with the SEC on March 26, 2024. ### Application of Critical Accounting Policies Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. There were no material changes to our critical accounting policies as reported in our Annual Report. A description of certain accounting policies that may have a significant impact on amounts reported in the financial statements is disclosed in “Note 3 – Summary of Accounting Policies” to the notes to the consolidated financial statements contained in the Annual Report. ## Controls and procedures As filed, 1,434 characters. ### Evaluation of Disclosure Controls and Procedures Management of the Company, with the participation of its Chief Executive Officer and Chief Financial Officer (its Certifying Officers), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the evaluation as of September 30, 2024, the Company’s Certifying Officers concluded that the Company’s disclosure controls and procedures were effective. The Company has established disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management of the Company, with the participation of its Certifying Officers, as appropriate, to allow timely decisions regarding required disclosure. ### Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the nine months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ## Risk factors As filed, 1,074 characters. Our business is subject to various risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations. You should carefully consider the risks and uncertainties described in the Annual Report on Form 10-K filed on March 26, 2024. Our business faces significant risks and uncertainties, and those described in our Annual Report may not be the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also significantly impair our business, financial condition or results of operations. If any of these risks or uncertainties occur, our business, financial condition or results of operations could suffer, the market price of our common stock could decline and you could lose all or part of your investment in our common stock. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Filed Nov 8, 2024. Source: SEC EDGAR, the filing index for accession 0001628280-24-046537. Last ingested by Listed: Oct 27, 2026, 16:12 ET. No prices; not investment advice.