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Thursday, 07/27/2017 8:17:02 PM

Thursday, July 27, 2017 8:17:02 PM

Post# of 50154
My letter to Jenny. I don't expect a reply, but I sure do feel better.

Dear Dr. Simpson –

I am in receipt of your July 26, 2017, letter to stockholders. I must say it was clever of you to bury it as an attachment to your SEC filing rather than release it as a communication directly to stockholders. After all, the fun of the hunt is in the chase, as they say, and digging through the multiple, near-simultaneous, mid-trading day filings as I was driving to work just added to the excitement.

That said, and crucial correspondence distribution methodologies aside, I feel compelled to share my, and other retail shareholders’, disappointment with your seeming disregard for what many would view as your fiduciary responsibilities as CEO, those being to ensure the long-term financial viability of the company and to deliver value (read as: a return on investment) to shareholders.

While I am a relatively new investor with a comparatively insignificant stake in Delcath Systems (though – between us – I did take note of the fact that my 81,500 share stake does surpass your own personal investment in the firm), I am writing to prevail upon you to realign your priorities as CEO.

Yes, I understand that your ultimate goal is to bring potentially life-saving or, at a minimum, life-extending technology to the U.S. market. That is, indeed, an admirable endeavor and one from which I’d not ask you to stray. It is also a goal which requires a substantial capital investment. Surely you were aware of this when you assumed your position as CEO and, even more recently, when, in a previous letter to shareholders, you assured investors that Delcath Systems possessed sufficient capital to fund activities through the remainder of 2017.

I am concerned that, in pursuit of this lofty goal and despite your previous assurances to the contrary, you may have adapted a single-minded “the end justifies the means” mentality, resulting in rash and short-sighted decision-making in regard to financial operations, thus rendering Delcath Systems cash poor and unable to raise additional capital.

I feel it necessary to remind you that while privately held companies enjoy the luxury of non-accountability, public firms do not share this privilege. Instead, a publicly-held company – and you as CEO of such – have yet another fiduciary responsibility in addition to those stated above, that being to communicate with your shareholders and keep them apprised regarding material developments.

Toward that end, I respectfully request that your firm issue a much-anticipated and greatly-needed Press Release. As I’m sure you’re aware, in the absence of concrete information, people have a tendency to fill the void with all manner of conjecture. Such is the case now with Delcath Systems; speculation abounds.

As inspiration for said Press Release, I provide the following suggested topics:

· Status of any pending/approved request for an extension to Delcath’s NASDAQ compliance deadline of 8/14/17;

· Clarification regarding voting methodologies/instructions for the upcoming Reverse Split vote (Apparently the phone number used during the June 2017 vote is still active, leading many to believe that voting by phone is acceptable; however, your filings stated that only written votes would be accepted. Given the high stakes and the adaption of field-tilting rules for the vote – e.g., an absence of a vote shall constitute a “yes” vote – I think you can see why this would be important, particularly if you aren’t intentionally attempting to mislead shareholders as pertains to the voting process);

· The recent patent awarded to Delcath Systems

· An updated status on clinical trials and their status with the FDA (There is a great deal of supposition related to evidence of a 510(k) application filing by Delcath Systems which was located on the FDA site. It remains unclear if this is, indeed, a new filing pending approval or simply the original registration/filing perhaps related to manufacture/sale of your device overseas)

· A definitive Q2 2017 earnings release date

· An explanation regarding the unanticipated expenses which have now rendered Delcath unable to fund operations beyond September 2017, a three-month shortfall of the previously assured operational funding

While there is, no doubt, much more which could be addressed in the requested Press Release, information regarding these topics would go a long way in clarifying the firm’s status for shareholders. Delcath Systems, and you personally, might also enjoy the effects of at least a temporary appreciation by shareholders of your newfound transparency, making the upcoming Reverse Split vote more palatable.

Thank you for reading this missive and for your consideration of my request as a shareholder in your company. I can tell you that I, and I suspect many others, can be far more forgiving if provided the respect and courtesy afforded by forthright communication, whether it be of good or bad news. In researching your firm, I suspect you have both to share.

Sincerely -
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