Stockholders' Equity (Deficit) | (9) Stockholders’ Equity (Deficit) Authorized Shares The Company is authorized to issue 40,000,000 shares of common stock, $0.01 par value, and 10,000,000 shares of preferred stock, $0.01 par value. To date, the Company has designated the following preferred stock: Series A (4,200 shares), Series B (2,360 shares), Series C (590 shares), Series D (10,000 shares), Series E (40,000 shares) and Series E-1 Preferred Stock As of June 30, 2022, there were an aggregate of 11,357 shares of Series E and Series E-1 Omnibus Equity Incentive Plan On September 30, 2020, the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was adopted by the Company’s Board of Directors. On November 23, 2020, the Company’s stockholders approved the 2020 Plan. The 2020 Plan will continue in effect until the tenth anniversary of the date of its adoption by the Board or until earlier terminated by the Board. The 2020 Plan is 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 Employee Stock Purchase Plan In August 2021, the Company’s Board of Directors, with shareholder approval in May 2022, adopted the Employee Stock Purchase Plan (ESPP). The Company ESPP’s plan provides for a maximum of 260,295 shares of common stock to be purchased by participating employees. Employees who elect to participate in the Company’s ESPP will be able to purchase common stock at the lower of 85% of the fair market value of common stock on the first or last day of the applicable six-month Equity Offerings and Placements At-the-Market 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 $10.0 million (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 is required to 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 $50,000 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 90-day There were no shares sold during the six months ended June 30, 2022. Private Placement On July 20, 2022, Delcath closed a private placement for the issuance and sale of 690,954 shares of common stock (the “Common Stock”) and 566,751 pre-funded “Pre-Funded Pre-Funded Pre-Funded Pre-Funded Stock Options The Company values stock options using the Black-Scholes option pricing model and used the following assumptions during the reporting periods: Six months ended June 30, 2022 2021 Expected terms (years) 5.23 - 6.46 5.86 Expected volatility 174.81% -180.33% 178.33 Risk-free interest rate 1.75% -2.93% 0.9% Expected dividends 0.00% 0.00% The weighted average estimated fair value of the stock options granted during the six months ended June 30, 2022 and 2021 was approximately and $9.87 per share, respectively. The following is a summary of stock option activity for the six months ended June 30, 2022: Number of Options Weighted Average Weighted Average Aggregate Intrinsic Outstanding at January 1, 2022 1,732,460 $ 11.69 Granted 650,083 7.05 Expired (29,116 ) 10.73 Cancelled/Forfeited (42,034 ) 10.35 Outstanding at June 30, 2022 2,311,393 $ 10.42 8.7 $ — Exercisable at June, 2022 952,670 $ 11.48 8.4 $ — The following table summarizes information for stock option shares outstanding and exercisable at June 3 Options Exercisable Range of Exercise Prices Outstanding Number of Weighted Average Number of Options $6.24 - $53.85 2,310,894 8.7 952,171 $53.85+ 499 6.6 499 2,311,393 8.4 952,670 The following is a summary of share-based compensation expense in the statement of operations for the three and six months ended June 30, 2022 and 2021 (in thousands): Three months ended J u , Six months ended June 30, 2022 2021 2022 2021 Selling, general and administrative $ 918 $ 1,124 $ 1,958 $ 2,590 Research and development 503 463 1,025 1,093 Cost of goods sold 52 39 108 91 Total $ 1,473 $ 1,626 $ 3,091 $ 3,774 At June 30, 2022, there was $8.0 million of aggregate unrecognized compensation expense related employee and board stock option grants. The cost is expected to be recognized over a weighted average period of 2 years. Warrants The following is a summary of warrant activity for the six months ended June 30, 2022: Warrants Weighted Average Exercise Price Weighted Average Remaining Life (in years) Outstanding at January 1, 2022 3,894,498 $ 9.27 Warrants issued — — Warrants exercised — — Warrants expired — — Outstanding at June 30, 2022 3,894,498 $ 9.27 2.7 Exercisable at June 30, 2022 3,894,498 $ 9.27 2.7 The following table presents information related to stock warrants at June 30, 2022 Warrants Exercisable Range of Exercise Prices Outstanding Number of Warrants Weighted Average Remaining Warrant Term (in years) Number of Warrants $0.01 283,755 3.4 283,755 $10.00 3,610,743 2.7 3,610,743 3,894,498 2.7 3,894,498 |