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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2020
Stockholders Equity Note [Abstract] |
Stockholders' Equity |
(9) | Stockholders’ Equity
Preferred Stock Series E and Series E-1 Preferred Stock On July 11, 2019, the Company entered into a securities purchase agreement with certain accredited investors pursuant to which Delcath sold to investors an aggregate of 20,000 shares of our Series E convertible preferred stock, par value $0.01 per share, or the “Series E Preferred Stock”, at a price of $1,000 per share and a warrant, or a “2019 E Warrant”, to purchase a number of shares of common stock equal to the number of shares of common stock issuable upon conversion of the Series E Preferred Stock purchased by the investor, or the “July 2019 Private Placement”. In connection with the July 2019 Private Placement, the Company exchanged $11,800 of debt, interest and Series D Warrants for 11,500 shares of Series E Preferred Stock and related 2019 E Warrants, $100 in accounts payables for 149 shares of Series E Preferred Stock and related 2019 E Warrants and issued 923 shares of Series E Preferred Stock and related 2019 E Warrants to certain investors in exchange for a waiver of rights under exchange agreements signed in December 2018 and March 2019, or the “Debt Exchange”. On August 19, 2019, the Company entered into a securities purchase agreement with certain accredited investors pursuant to which Delcath sold to investors an aggregate of 9,510 shares of Series E-1 convertible preferred stock, par value $0.01 per share, or the Series E-1 Preferred Stock, at a price of $1,000 per share and a warrant, or a “2019 E-1 Warrant”, and together with the 2019 E Warrant, the “2019 Warrants”, to purchase a number of shares of common stock of the Company equal to the number of shares of common stock issuable upon conversion of the Series E-1 Preferred Stock purchased by the investor, or the “August 2019 Private Placement”, and, collectively with the July 2019 Private Placement, the “Private Placements”. Each share of Series E Preferred Stock and Series E-1 Preferred Stock, or, collectively, the “Preferred Stock”, is convertible at any time at the option of the holder into the number of shares of common stock determined by dividing the current conversion price. At December 31, 2019, the conversion price was $23.04 and was subsequently adjusted to $10.00 upon the pricing of a $21,996 public offering of the Company’s common stock and warrants on May 5, 2020, as discussed further below. As a result of the price adjustment, the excess of the fair value of the common stock that will be received on conversion, measured on the price reset date, exceeded the original proceeds allocated to the Preferred Stock by $12,000. The holders of the Preferred Stock are entitled to receive dividends on shares of Preferred Stock equal (on an “as converted” basis) to and in the same form as dividends paid on shares of the common stock. Any such dividends that are not paid to the holders of the Preferred Stock will increase the stated value. No other dividends will be paid on shares of Preferred Stock. Each 2019 Warrant had an exercise price equal to $23.04 per share at December 31, 2019. The exercise price was subsequently adjusted to $10.00 per share upon the pricing of a $21,996 offering on May 5, 2020, as discussed further below, which resulted in the recognition of a $54.5 deemed dividend. The 2019 Warrants are exercisable until 5:00 p.m. (NYC time) on December 24, 2024. As of September 30, 2020, there were 21,473 shares of Preferred Stock outstanding and 1,826,579 2019 Warrants outstanding. Public Offering On May 5, 2020, the Company closed a public offering of 1,823,000 shares of common stock, 377,000 pre-funded warrants and Series F warrants to purchase 2,224,900 shares of common stock at an exercise price of $10.00 per share (the “Public Offering”). Delcath received gross proceeds of approximately $21,996 from the offering, before deducting the underwriting discount and estimated offering expenses. As a result of the Public Offering, the Preferred Stock conversion price was adjusted to $10.00 per share and the exercise price of the 2019 Warrants was adjusted to $10.00 per share and neither instrument is subject to further price resets. At-the-Market Offering On August 18, 2020, the Company entered into a sales agreement with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), pursuant to which the Company may offer and sell, from time to time, through Cantor Fitzgerald, as sales agent or principal, shares of the Company’s common stock, (the “Placement Shares”), having an aggregate offering price of up to $10,000 (the “ATM Offering”). The Company has no obligation to sell any Placement Shares under the sales agreement. Subject to the terms and conditions of the sales agreement, Cantor Fitzgerald will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of the Nasdaq Stock Market, to sell Placement Shares from time to time based upon the Company’s instructions, including any price, time or size limits specified by the Company. The Company will pay Cantor Fitzgerald a commission of 3.0% of the aggregate gross proceeds from each sale of Placement Shares, reimburse Cantor Fitzgerald’s legal fees and disbursements up to $50.0 and provide Cantor Fitzgerald with customary indemnification and contribution rights. The sales agreement may be terminated by Cantor Fitzgerald or the Company upon notice to the other party as provided in the sales agreement, or by Cantor Fitzgerald at any time in certain circumstances, including the occurrence of a material and adverse change in the Company’s business or financial condition that makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares. In connection with the ATM Offering, in consideration for a fee equal to 1.05% of the gross sales price per share sold in the ATM Offering, ROTH Capital Advisors, LLC (“Roth”) waived, solely with respect to the ATM Offering, (i) Roth’s right, pursuant to certain engagement letters dated August 14, 2019 and January 13, 2020 between Roth and the Company, to act as placement agent or underwriter with respect to offerings of the Company’s securities and to receive a minimum of 35% of the fees paid to the agents or underwriters for such offerings and (ii) the lock-up provision included in a certain Underwriting Agreement dated May 1, 2020 between Roth and the Company requiring the prior written consent of Roth for any offer or sale of the Company’s common stock by the Company during the 90-day period following the date of the Underwriting Agreement. Rosalind Master Fund L.P. and Rosalind Opportunities Fund I L.P. (together, “Rosalind”) waived, solely with respect to the ATM Offering, Rosalind’s right, pursuant to that certain Support and Conversion Agreement dated March 11, 2020 between Rosalind and the Company, as amended, to participate in any offer or sale of the Company’s common stock by the Company occurring within a two-year period. On August 18, 2020, the Company and the holders of a requisite number of shares of the Company’s Series E Convertible Preferred Stock and Series E-1 Convertible Preferred Stock and related warrants (the “Holders”) entered into an Amendment to those certain Securities Purchase Agreements, dated July 11, 2020 and August 15, 2019, among the Company and the parties signatory thereto, for the purpose of clarifying that offerings of the Company’s common stock in “at the market” transactions are excluded from the rights of the holders set forth therein. Through September 30, 2020, the Company sold 6,100 shares of common stock for aggregate gross proceeds of $70.5 pursuant to the ATM Offering. Other Common Stock Issuances During the nine months ended September 30, 2020 the Company issued 2,000,224 shares of the Company’s common stock pursuant to conversions of Preferred Stock. During the nine months ended September 30, 2020, the Company issued 6,000 shares of common stock associated with the exercise of pre-funded warrants and 60,117 shares of common stock associated with other warrants. During the nine months ended September 30, 2020, the Company issued 72,976 shares of common stock as compensation. 2020 Omnibus Equity Incentive Plan On September 30, 2020 (the “Effective Date”), the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was adopted by the Company’s Board of Directors. If subsequently approved by the Company’s stockholders, the 2020 Plan will continue in effect until the tenth anniversary of the Effective Date, or until earlier terminated by the Board. The 2020 Plan will be administered by the Board of Directors or a committee designated by the Board of Directors. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, as well as other stock-based awards or cash awards that are deemed to be consistent with the purposes of the plan to Company employees, directors and consultants. There are 675,000 shares of common stock reserved under the 2020 Plan, of which all remained available to be issued as of September 30, 2020 (see Note 14 – Subsequent Events – Option Grants for details of awards granted on October 1, 2020). Upon stockholder approval of the 2020 Plan, no further grants of awards will be made under the 2019 Equity Incentive Plan. Share-Based Compensation The Company’s 2019 Equity Incentive Plan (the “Plan”) allows for grants in the form of incentive stock options, nonqualified stock options, stock units, stock awards, stock appreciation rights, and other stock-based awards. All of the Company’s officers, directors, employees, consultants, and advisors are eligible to receive grants under the Plan. The maximum number of shares reserved for issuance under the Plan is 2,142. Options to purchase shares of common stock are granted at exercise prices not less than 100% of fair value on the dates of grant. As of September 30, 2020, the Plan had approximately 1,643 shares available for grant. The following is a summary of stock option activity under the Plan for the nine months ended September 30, 2020:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2019 |  |  | 1,640 |  |  | $ | 196.70 |  |  | 9.1 |  | $ | — |
Granted |  |  | — |  |  |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | (1,141 | ) |  |  |  |  |  |  |  |  |  |
Outstanding at September 30, 2020 |  |  | 499 |  |  | $ | 196.70 |  |  | 8.4 |  | $ | — |
Exercisable at September 30, 2020 |  |  | 499 |  |  | $ | 196.70 |  |  | 8.4 |  | $ | — |
At September 30, 2020, there was no unrecognized compensation expense related to non-vested share-based compensation awards under the Plan. The following is a summary of share-based compensation expense in the statement of operations for the three and nine months ended September 30, 2020
| Three months ended September 30, |  |  | Nine months ended September 30, |
(in thousands) | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Selling, general and administrative | $ | — |  |  | $ | 54 |  |  | $ | 655 |  |  | $ | 160 |
Research and development |  | — |  |  |  | 16 |  |  |  | 5 |  |  |  | 43 |
Total | $ | — |  |  | $ | 70 |  |  | $ | 660 |  |  | $ | 203 |
Warrants The following is a summary of warrant activity for the nine months ended September 30, 2020:
|  | Warrants |  |  | Exercise Price per Share |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Life (Years) |
Outstanding at December 31, 2019 |  |  | 1,826,608 |  |  | $7.00 - $23.04 |  | $ | 23.04 |  |  |  | 5.0 |
Issued |  |  | 2,601,900 |  |  |  |  |  | 10.00 |  |  |  |  |
Exercised |  |  | (66,117 | ) |  |  |  |  | 9.09 |  |  |  |  |
Expired |  |  | (18 | ) |  |  |  |  | 7.00 |  |  |  |  |
Outstanding at September 30, 2020 |  |  | 4,362,373 |  |  | $0.01- $10.00 |  | $ | 9.15 |  |  |  | 4.5 |
As of September 30, 2020, warrants to purchase 371,000 shares of common stock were pre-funded, and the exercise price was $0.01 per share. The remaining warrants were exercisable at $10.00 per share. Each 2019 Warrant had an exercise price equal to $23.04 per share at December 31, 2019. The exercise price was subsequently adjusted to $10.00 per share upon the pricing of a $22,000 offering on May 5, 2020, as discussed below, which resulted in the recognition of a $54.5 deemed dividend.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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