(1)	Description of Business

Delcath is a specialty pharmaceutical and medical device company focused on oncology. The Company's proprietary technology 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. Its initial focus is on the treatment of primary and metastatic liver cancers. The Company believes that the proprietary technology is a platform that may have broader applicability, including the use of other drugs to treat the liver, as well as for the treatment of cancers in other organs and regions of the body. In 2010, the Company announced that its randomized Phase 3 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 has also completed a multi-arm Phase 2 trial to treat other liver cancers.

Outside of the United States, the Company's proprietary system to deliver and filter melphalan hydrochloride is marketed as a device under the trade name Delcath Hepatic CHEMOSAT® Delivery System (CHEMOSAT Delivery System for Melphalan). In April 2012, the Company obtained authorization to affix a CE Mark for the Generation Two CHEMOSAT Delivery System for Melphalan. The right to affix the CE Mark allows the Company to market and sell the CHEMOSAT System for Melphalan in Europe.

In the United States, the Company's proprietary system for the administration of melphalan hydrochloride to the liver is considered a combination drug and device product, and is regulated as a drug by the United States Food and Drug Administration (FDA). The Company submitted its New Drug Application (NDA) to the FDA on August 15, 2012, with the proposed trade name Melblez KitTM (Melblez (melphalan) for Injection for use with the Delcath Hepatic Delivery System) (Melblez Kit), and is seeking approval for commercial sale of the Melblez Kit in the treatment of patients with unresectable metastatic ocular melanoma in the liver. The NDA was accepted for filing by the FDA on October 15, 2012. On April 3, 2013 the FDA extended its Prescription Drug User Fee Act (PDUFA) goal date to September 13, 2013. On May 2, 2013 the FDA's Oncologic Drugs Advisory Committee (ODAC) voted 16 to 0 with no abstentions that benefits for treatment with the Melblez Kit (that contains the Clark or Generation 1 filter) do not outweigh the risk associated with the procedure. The company intends to meet with the FDA to discuss and clarify regulatory requirements for the approval of the Melblez Kit containing the Generation 2 filter for unreseciable metastalic ocular mclanoma in the liver or other indications. The FDA is not bound by the recommendation of its advisory committee, but will consider the committee's guidance as it evaluates the Melblez Kit NDA. Declath will continue to work closely with the FDA throughout its ongoing evaluation of the Melblez Kit. There can be no assurance that the FDA will ultimately approve the Company's NDA.

The Company has incurred losses since inception. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales. Management believes that its capital resources are adequate to fund operations for the next twelve months, but anticipates that additional working capital may 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.