On December 7, 2022, Delcath Systems, Inc. ( the "Company") and certain accredited investors (each an "Investor" and collectively, the "Investors") entered into a securities purchase agreement (the "Securities Purchase Agreement") pursuant to which the Company agreed to sell and issue to the Investors in a private placement (the "Private Placement") (i) an aggregate of 1,448,889 shares (the "Shares") of the Company’s common stock, par value $0.01 per share (the "Common Stock"), at a purchase price of $2.90 per share, and (ii) in lieu of shares of Common Stock, 692,042 pre-funded warrants (the "Pre-Funded Warrants") to purchase Common Stock (the "Warrant Shares" and together with the Shares, the "Securities"), at a purchase price of $2.89 per Pre-Funded Warrant (Filing, Delcath Systems, DEC 7, 2022, View Source [SID1234625196]). The Pre-Funded Warrants will have an exercise price of $0.01 per share of Common Stock, be immediately exercisable and remain exercisable until exercised in full.
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The Private Placement closed on December 13, 2022. The Company received gross proceeds from the Private Placement of approximately $6.2 million, before deducting offering expenses payable by the Company. The Company intends to use the net proceeds of the Private Placement for working capital and other general corporate purposes.
The foregoing description of the Securities Purchase Agreement and the Pre-Funded Warrants does not purport to be complete and is qualified in its entirety by reference to the complete text of the Securities Purchase Agreement and the form of the Pre-Funded Warrant, which are attached hereto as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and are hereby incorporated by reference into this Item 1.01.
Registration Rights
In connection with the Private Placement, the Company and the Investors entered into a Registration Rights Agreement dated December 7, 2022 (the "Registration Rights Agreement"), providing for the registration for resale of the Securities (including the shares of Common Stock underlying the Pre-Funded Warrants) that are not then registered on an effective registration statement, pursuant to a registration statement (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "SEC") on or prior to February 6, 2023 (the "Filing Date"). The Company has agreed to use its best efforts to cause the Registration Statement to be declared effective as soon as possible, but in no event later than 75 days of the closing of the Private Placement (or 120 days in the event of a full review of the Registration Statement by the SEC) (the "Effectiveness Date"), and to keep the Registration Statement continuously effective for a period that extends from the first date on which the SEC issues an order of effectiveness in relation to the Registration Statement until such date that all registrable securities (as such term is defined in the Registration Rights Agreement) covered by the Registration Statement have been sold thereunder or pursuant to Rule 144 or may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.
In the event (i) the Registration Statement is not filed on or prior to the Filing Date, or (ii) the Company fails to file with the SEC a request for acceleration of a registration statement in accordance with Rule 461 promulgated under the Act within five trading days of the date that the Company is notified by the SEC that the Registration Statement will not be "reviewed" or will not be subject to further review, or (iii) prior to the effective date of the Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the SEC in respect of such Registration Statement within fifteen calendar days after the receipt of comments by or notice from the SEC that such amendment is required in order for such Registration Statement to be declared effective, or (iv) the Registration Statement is not declared effective by the Effectiveness Date, or (v) after the effective date of the Registration Statement, it ceases for any reason to remain continuously effective as to the Securities, or the holders are otherwise not permitted to utilize the prospectus therein to resell the Securities, for more than fifteen consecutive calendar days or more than an aggregate of twenty calendar days during any 12-month period, then, until the applicable event is cured, the Company shall pay to each holder an amount in cash, as partial liquidated damages and not as penalty, equal to the product of 1.0% multiplied by the aggregate subscription amount paid by such holder pursuant to the Securities Purchase Agreement, subject to certain caps set forth in the Registration Rights Agreement.
The Company has granted the Investors customary indemnification rights in connection with the Registration Statement. The Investors have also granted the Company customary indemnification rights in connection with the Registration Statement.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated by reference into this Item 1.01.
Item 3.02
Unregistered Shares of Equity Securities.
The information contained above in Item 1.01 relating to the Private Placement is hereby incorporated by reference into this Item 3.02. Based in part upon the representations of the Investors in the Securities Purchase Agreement, the offering and sale of the securities was made in reliance on the exemption afforded by Regulation D under the Securities Act of 1933, as amended (the "Securities Act") and/or Regulation S under the Securities Act inasmuch as certain Investors are not a "U.S. person" (as defined in Rule 902 under the Securities Act) and the requirements of Rule 903 under the Securities Act are otherwise met, and corresponding provisions of state securities or "blue sky" laws. The Securities (including the shares of Common Stock underlying the Pre-Funded Warrants) have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements. The sale of the Securities did not involve a public offering and was made without general solicitation or general advertising. The Investors represented that they are accredited investors, as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and that they are acquiring the securities for investment purposes only and not with a view to any resale, distribution or other disposition of the securities in violation of the U.S. federal securities laws.
Neither this Current Report on Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy shares of Common Stock or other securities of the Company.