Delcath Systems Inc (DCTH)

[Mintmoondog]

Why I believe B/O is either imminent or done? Okay please understand that this post is just conjecture, I have no absolute proof. However, I have been doing a lot of digging and also have picked up some very interesting insights from other posters throughout the web that I will try to compile. Here is why I believe that DCTH might have already received and agreed to a B/O offer and are just finalizing terms and deciding on announcement date.

1. Radio silence. One would think after such a dramatic vote against R/S that the company would issue some form of PR to calm investors or provide insight into steps forward. Nothing. In fact, many astute people have informed us that not only has their website financials been scrubbed but so has their FB and twitter. Why? Only one reason for this - if they are in active talks with a large company they would be required to have absolute radio silence. Which is the current state of affairs. If not, then of course the CEO is obligated to update the shareholders.

2. Recent SEC filings You can find my analysis posted here a couple days ago: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=132624985
Since this post many lazy posters have downplayed or criticized the analysis with the common statements "its no big deal" "its just a few shares" "just paying taxes" However, they do not understand that this was EVENT driven not annual. Also it was a "sell to cover" of VESTED shares. This is automatic when/if the CEO/Board resigns or if their was a B/O. They may or may not sell their current shares but the vested shares held by the company in a stock option plan must be exercised immediately if they leave the company. SEC required these reports 48 hours after the transaction.

3. R/S. It is important to understand that the company did NOT expect this to fail. They just figured they could let the SP drop to almost nothing - then do a 50 to 500 R/S to meet 1.00 NASDAQ requirements and then dilute the poor shareholders again! I feel badly for previous shareholders but this is the nature of the beast. In this case the SH "lucked" into the rejection! In fact the vote was 2 to 1 for the R/S but they did not meet the 51% support requirement. This leads to my most relevant reason to suspect that a BO is happening or has happened

4. Finances. Sure the company states that they have money through the year but they now face a double whammy that I believe has completely shut the door for the present leaders/board to continue. A. They blundered in timing and now must raise the SP from .02 to 1.00 in one month (10 consecutive days) or face delisting from NASDAQ. They are not going to be able to do this give the toxic financing shares dilution (currently over 400M shares outstanding from under 200M earlier this year) B. No means to continue financing after this year. What are they going to do? They were not stable enough to issue shares or procure loans. Their balance sheet is a mess. I can't see them getting away with another round of toxic warrants after this year when they let the SP drop to .02 (what bank would touch this?). So basically, they are done. They can hope for positive FDA test releases in Q4. But what will that really buy them by that time?

5. Revenue. Yes, the company has had some success in the EU and the great thing for us investors is that CHEMOSAT is saving lives. However, they don't have the muscle to force reimbursement outside of Germany. Only a large pharma company can leverage the treatment for money so in this way it actually makes sense to get bought out now.

6. Big Pharma. They know this company, they know the treatment, and they know the likelihood of success. If you are them when would you come in and buy them out? How about when the Market cap falls to 8M! Now at .20 it is only 80M! They would not wait for the SP to recover before taking over. An interesting question is what is the buyout price? I have no idea but here are some interesting numbers. I believe 400M shares is safe (might be higher but that is the latest number posted on NASDAQ) and lets assume that the offer is for 500M dollars for the company (sounds cheap no?) - that would be 1.20 per share; a nice return from .20. How about 1B? Then we are looking at 2.50 a share. These numbers make it obvious that there is an asymmetric upside to this speculative investment.

7. Timing. I would be foolish to predict a date; however, sooner seems more logical than later and there is a hard deadline for delisting in August. Maybe the big player will stall and hope for an even better deal after the delisting but there are more than one pharma companies and the pipeline seems too positive to play games with, bidding war? Then things get REALLY interesting.

We'll see whether I am right or wrong but it has been an interesting research project nonetheless