On March 29, 2023 Delcath Systems, Inc. (Nasdaq: DCTH) (the "Company" or "Delcath"), an interventional oncology company focused on the treatment of primary and metastatic cancers of the liver, reported that it has closed its previously announced private placement (the "Private Placement"), for gross proceeds of approximately $25.0 million from the issuance and sale of shares of the Company’s common stock and shares of its Series F Convertible Preferred Stock and warrants, before deducting the fees paid to the placement agent and the financial advisors of the Private Placement and other financing expenses payable by the Company (Press release, Delcath Systems, MAR 29, 2023, View Source [SID1234629509]).
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The Company intends to use the net proceeds from the Private Placement for working capital purposes and other general corporate purposes.
The Private Placement was led by Vivo Capital with participation from Logos Capital, BVF Partners LP, Stonepine Capital Management, LLC, Serrado Capital LLC and supported by existing investor, Rosalind Advisors.
The Private Placement is expected to enable the Company to have sufficient cash past its anticipated PDUFA date of August 14, 2023, and fund the commercialization of HEPZATO, if approved.
About the Private Placement
Pursuant to a securities purchase agreement, the Company has 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, 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 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, 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 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, 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.
The shares of Series F-1 Convertible Preferred Stock, and accompanying warrants, were issued at a price of $1,000.00 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.
Pursuant to a separate securities purchase agreement, the Company has issued to the Company’s Chief Executive Officer 19,646 shares of the Company’s common stock and Tranche A and Tranche B warrants to purchase shares of common stock for an aggregate of $0.1 million, exercisable into an aggregate of up to approximately 48,000 shares of common stock across both tranches.
All of the securities in this Private Placement were offered by the Company.
Canaccord Genuity acted as the placement agent for the Private Placement. BTIG and Roth Capital Partners acted as financial advisors.
The securities sold and issued in connection with the Private Placement described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws. Accordingly, such securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws. The Company has agreed to file a resale registration statement with the U.S. Securities and Exchange Commission ("SEC") for purposes of registering the resale of the common stock issued or issuable in connection with the Private Placement.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
For further information, please see the Company’s current report on Form 8-K to be filed with the SEC.