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Description of Business and Summary of Significant Accounting Policies

Delcath Systems, Inc. (the "Company") is a specialty pharmaceutical and medical device company focused on oncology. Delcath's proprietary system for chemosaturation is designed to administer high dose chemotherapy and other therapeutic agents to diseased organs or regions of the body, while controlling the systemic exposure of those agents. The Company's initial focus is on the treatment of primary and metastatic liver cancers. In 2010, Delcath announced that its randomized Phase III clinical trial for patients with metastatic melanoma in the liver had successfully achieved the study's primary endpoint of extended hepatic progression-free survival. The Company also completed a multi-arm Phase II trial to treat other liver cancers. The Company obtained authorization to affix a CE Mark for the Delcath Hepatic CHEMOSAT® delivery system in April 2011 and for the second generation hemofiltration cartridge for CHEMOSAT in April 2012. In October 2012, the Company satisfied all of the requirements to affix the CE Mark to its CHEMOSAT device system for use with doxorubicin hydrochloride injection, providing a regulatory pathway for CHEMOSAT hydrochloride injection for countries in Asia that accept CE Marking as part of their national reguwith doxorubicin latory requirements. The Company submitted its New Drug Application (NDA) to the U.S. Food & Drug Administration (FDA) on August 15, 2012, seeking approval for commercial sale of its chemosaturation system with melphalan in the treatment of patients with unresectable metastatic melanoma in the liver. The Company's NDA was accepted for filing by the FDA, and has been designated for standard review with a Prescription Drug User Fee Act (PDUFA) goal date of June 15, 2013. The Company has not yet received FDA approval for commercial sale of its system in the United States. Delcath transitioned from a development stage company to a commercial organization with operational activities in April 2012. Accordingly, reporting as a development stage company is no longer deemed necessary.

The Company has incurred losses since inception and anticipates incurring additional losses until such time, if ever, that it can generate significant sales. Management anticipates that additional working capital will be required to continue operations. To the extent additional capital is not available when needed, the Company may be forced to abandon some or all of its development and commercialization efforts, which would have a material adverse effect on the prospects of the business. Operations of the Company are subject to certain risks and uncertainties, including, among others, uncertainty of product development; uncertainty regarding regulatory approval; technological uncertainty; uncertainty regarding patents and proprietary rights; comprehensive government regulations; limited commercial manufacturing, marketing or sales experience; and dependence on key personnel.