(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 to diseased organs or regions of the body, while controlling the systemic exposure of those agents. The Company believes that its 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.

The Company is currently focused on three main goals:

Pursuit of new clinical trials for its CHEMOSAT/Melblez Kit system with melphalan to support a regulatory application for labeling for hepatocellular carcinoma (HCC or primary liver cancer).

European commercialization of the Delcath Hepatic CHEMOSAT^® Delivery System (CHEMOSAT Delivery System for Melphalan). In 2013 the Company is focused on expanding clinical usage of the CHEMOSAT system and obtaining compelling reimbursement for CHEMOSAT procedures in certain markets in Europe.

U.S. Food & Drug Administration (FDA) approval of its New Drug Application (NDA) for Melblez ^TM Kit (Melblez (melphalan) for Injection for use with the Delcath Hepatic Delivery System) (Melblez Kit). The Company is currently waiting for the FDA to complete its review of the Company’s NDA. The Company continues to believe that approval for an indication in ocular melanoma that is metastatic to the liver in the United States would meet a high unmet need.

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 Kit^TM (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 of treatment with the Melblez Kit (that contains the Clark or Generation 1 filter) do not outweigh the risks associated with the procedure. The Company intends to meet with the FDA to discuss and clarify regulatory requirements for approval of the Melblez Kit containing the Generation 2 filter for unresectable metastatic ocular melanoma 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. Delcath 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.