atos20190327_8k.htm

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549 

FORM 8-K 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): March 28, 2019

 

Atossa Genetics Inc. 

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

 

 

 

Delaware

 

001-35610

 

26-4753208

  

 

  

 

 

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(I.R.S. Employer
Identification No.)

 

 

 

 

 

 

107 Spring Street

Seattle, Washington

 

 

98104

  

 

 

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (206) 325-6086

 

Not Applicable
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On March 28, 2019, Atossa Genetics Inc. (the “Company”) issued a press release announcing year end 2018 financial results and a Company update. A copy of the press release is attached as Exhibit 99.1 to this current report and is incorporated herein by reference.

 

 

 

The information in Items 2.02 and 9.01 of this report, including Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

 

 

Exhibit No.

 

Description

99.1

 

Press Release, dated March 28, 2019

 

 

 

* * *

 

 

 

 

 

 

 

 

 

 

 

SIGNATURES 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

Date: March 28, 2019

Atossa Genetics Inc.
 

 

 

By:  

/s/ Kyle Guse 

 

 

 

Kyle Guse

 

 

 

Chief Financial Officer, General Counsel and Secretary 

 

 

  

 

 

 

 

 

 

 

 

 

Exhibit Index

 

 

 

Exhibit No.

 

Description

99.1

 

Press Release, dated March 28, 2019

 

 

 

 

 

ex_139224.htm

Exhibit 99.1

 

 

 

Atossa Genetics Announces Year End 2018 Financial Results and Provides Company Update

 

 

 

SEATTLE, March 28, 2019 (GLOBENEWSWIRE) -- Atossa Genetics Inc. (Nasdaq:ATOS), a clinical-stage biopharmaceutical company developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions, today announced year end 2018 financial results and provided an update on recent company developments.

 

Steven C. Quay, M.D., Ph.D., Atossa Genetics’ President and CEO commented, "The end of 2018 marked two important milestones for Atossa. We completed the enrollment of our Phase 2 trial for topical Endoxifen in women with mammographic dense breasts. In addition, we received our first allowance by the FDA to provide Endoxifen through the federal “Expanded Access” program for a breast cancer patient prior to her surgery. We received a second allowance in March 2019 for this patient to continue treatment post-surgery. In the meantime, we continue to make great progress with our clinical programs and look forward to completing the dosing in the topical Endoxifen MBD trial in April and announcing preliminary results in the second quarter 2019. "

 

Recent Corporate Developments 

 

Atossa's important recent developments include the following:

 

 

March 2019 - FDA approval of oral Endoxifen for "Expanded Access" as post-mastectomy treatment for a U.S. breast cancer patient

 

March 2019 – Atossa received $11.3 million from the exercise of warrants that were previously outstanding

 

February 2019 - Update from "Expanded Access" program for the U.S. breast cancer patient taking oral Endoxifen prior to surgery showing sizeable reduction in cancer cell biological activity with no safety or tolerability issues

 

February 2019 – Atossa provided breast cancer prevention recommendations to the United States Preventative Services Task Force

 

January 2019 – Successfully completed and provided final results from male Phase 1 study of topical Endoxifen; no clinically significant safety nor tolerability issues and acceptable pharmacokinetics

 

December 2018 - FDA approval of Endoxifen for "Expanded Access" as preoperative systemic endocrine therapy for a U.S. breast cancer patient

 

October 2018 - Completed enrollment in Phase 2 study of topical Endoxifen to treat mammographic breast density.

 

 2018 Financial Results 

 

For the year end December 31, 2018 and 2017, we had no revenue and no associated cost of revenue.

 

Total operating expenses were $11,434,000 for the year ended December 31, 2018, which is an increase of $3,785,000 or 49 percent, from the year ended December 31, 2017. Operating expenses for 2018 consisted of research and development (R&D) expenses of $4,210,000 and general and administrative (G&A) expenses of $7,224,000. Operating expenses for 2017 consisted of R&D expenses of $2,328,000, G&A expenses of $4,859,000 and impairment of our Acueity intangible assets of $462,000.

 

R&D expenses for the year ended December 31, 2018, were $4,210,000, an increase of $1,882,000 or 81 percent from total R&D expenses in 2017 of $2,328,000. The increase in R&D expense is attributed to manufacturing and clinical trials associated with our Endoxifen program, salaries, and stock-based compensation. Our R&D expenses have increased because we commenced two Phase 2 studies of our proprietary Endoxifen during the year ended December 31, 2018. There were no Phase 2 studies of Endoxifen in 2017. Stock-based compensation expense also increased approximately $627,000 in 2018 as compared to 2017. We expect our R&D expenses to increase throughout 2019 as we commence additional Phase 2 clinical studies of Endoxifen, continue the clinical trial of fulvestrant administered via our microcatheters and continue the development of other indications and therapeutics, including CAR-T and immunotherapies administered via our intraductal technology.

 

G&A expenses were $7,224,000 for the year ended December 31, 2018, an increase of $2,365,000, or 49 percent from the total G&A expenses for the year ended December 31, 2017, of $4,859,000. G&A expenses consist primarily of personnel and related benefit costs, facilities, professional services, insurance, and public company related expenses. The increase in G&A expenses for year ended December 31, 2018, is mainly attributed to an increase in stock-based compensation expense of approximately $1,049,000, payroll expenses resulting from salary increases, one-time bonus payments of $350,000 and increased legal and professional consulting expenses of approximately $600,000 over the prior year.

 

As of December 31, 2018, the company had cash, cash equivalents and restricted cash of $10.5 million and in March 2019 received $11.3 million in additional cash from the exercise of previously outstanding warrants.

 

About Atossa Genetics 

 

Atossa Genetics Inc., is a clinical-stage biopharmaceutical company developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions. For more information, please visit www.atossagenetics.com.

 

Forward-Looking Statements

 

Forward-looking statements in this press release, which Atossa undertakes no obligation to update, are subject to risks and uncertainties that may cause actual results to differ materially from the anticipated or estimated future results, including the risks and uncertainties associated with any variation between preliminary and final clinical results, actions and inactions by the FDA, the outcome or timing of regulatory approvals needed by Atossa including those needed to commence studies, lower than anticipated rate of patient enrollment, estimated market size of drugs under development, the safety and efficacy of Atossa's products and services, performance of clinical research organizations and investigators, obstacles resulting from proprietary rights held by others with respect to fulvestrant, such as patent rights, potential market sizes for Atossa's drugs under development and other risks detailed from time to time in Atossa's filings with the Securities and Exchange Commission, including without limitation its periodic reports on Form10-K and 10-Q,each as amended and supplemented from time to time.

 

Atossa Genetics Company Contact:
Atossa Genetics Inc.
Kyle Guse CFO and General Counsel
Office: 866 893-4927
kyle.guse@atossagenetics.com

 

Investor Relations Contact:
Scott Gordon
Core IR

377 Oak Street

Concourse 2

Garden City, NY 11530

Office:(516) 222-2560

scottg@corprominence.com 

 

Source: Atossa Genetics Inc.

 

 

 

 

 

 

 

 

ATOSSA GENETICS INC.

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

As of December 31,

 

Assets

 

2018

 

 

2017

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,380,493

 

 

$

7,217,469

 

Restricted cash

 

 

110,000

 

 

 

55,000

 

Prepaid expenses

 

 

509,833

 

 

 

250,944

 

Research and development tax rebate receivable

 

 

518,098

 

 

 

358,277

 

Other current assets

 

 

30,942

 

 

 

16,344

 

     Total current assets

 

 

11,549,366

 

 

 

7,898,034

 

 

 

 

 

 

 

 

 

 

Furniture and equipment, net

 

 

54,487

 

 

 

11,467

 

Intangible assets, net

 

 

99,375

 

 

 

75,686

 

Other assets

 

 

17,218

 

 

 

178,907

 

     Total Assets

 

$

11,720,446

 

 

$

8,164,094

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

353,328

 

 

$

334,901

 

Accrued expenses

 

 

177,074

 

 

 

90,105

 

Payroll liabilities

 

 

935,070

 

 

 

784,867

 

Stock-based compensation liability

 

 

1,410,025

 

 

 

 

 

Other current liabilities

 

 

39,939

 

 

 

15,534

 

Total Current Liabilities

 

 

2,915,436

 

 

 

1,225,407

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock - $0.001 par value; 10,000,000 shares authorized, consisting of Series A convertible preferred stock- $0.001 par value; 4,000 shares authorized, and 0 shares outstanding as of December 31, 2018 and December 31, 2017; Series B convertible preferred stock- $0.001 par value; 25,000 and 0 shares authorized, and 2,379 and 0 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively

 

 

2

 

 

 

 

 

Additional paid-in capital- Series B convertible preferred stock

 

 

2,378,997

 

 

 

 

 

Common stock - $0.18 par value; 175,000,000 shares authorized, and 5,846,552 and 2,651,952 shares issued and outstanding, as of December 31, 2018 and December 31, 2017, respectively

 

 

1,052,372

 

 

 

477,342

 

Additional paid-in capital

 

 

82,204,902

 

 

 

71,887,674

 

Accumulated deficit

 

 

(76,831,263

)

 

 

(65,426,329

)

Total Stockholders' Equity

 

 

8,805,010

 

 

 

6,938,687

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

11,720,446

 

 

$

8,164,094

 

 

 

 

 

 

 

 

 

 

 

 

ATOSSA GENETICS INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

For the Years Ended December 31,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Research and development

 

$

4,209,981

 

 

$

2,328,087

 

General and administrative

 

 

7,224,252

 

 

 

4,859,369

 

Impairment of intangible assets

 

 

 

 

 

 

461,715

 

Total operating expenses

 

 

11,434,233

 

 

 

7,649,171

 

Operating loss

 

 

(11,434,233

)

 

 

(7,649,171

)

Change in fair value of common stock warrants

 

 

 

 

 

 

(280,747

)

Warrant financing expense

 

 

 

 

 

 

(192,817

)

Other income

 

 

29,299

 

 

 

154

 

Loss before income taxes

 

 

(11,404,934

)

 

 

(8,122,581

)

Income taxes

 

 

 

 

 

 

 

 

Net loss

 

$

(11,404,934

)

 

$

(8,122,581

)

Deemed dividend attributable to preferred stock

 

 

(11,479,308

)

 

 

(2,568,132

)

Net loss applicable to common shareholders

 

$

(22,884,242

)

 

$

(10,690,713

)

Loss per common share - basic and diluted

 

$

(5.50

)

 

$

(10.97

)

Weighted average shares outstanding - basic and diluted

 

 

4,157,746

 

 

 

974,773