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Atossa Genetics Announces Second Quarter 2019 Financial Results and Provides Company Update

Completes Second Quarter with Cash and Cash Equivalents of $17.1 Million

SEATTLE, Aug. 13, 2019 (GLOBE NEWSWIRE) -- Atossa Genetics Inc. (ATOS), a clinical-stage biopharmaceutical company developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions, today announced financial results for the second quarter ended June 30, 2019 and provided an update on recent company developments.

Steven C. Quay, M.D., Ph.D., Atossa Genetics’ President and CEO commented, "During the quarter we were very pleased to have achieved our primary endpoint in our Phase 2 trial of topical Endoxifen to reduce mammographic breast density (MBD). We are now focusing our efforts on the oral formulation of Endoxifen and are developing a modified-release oral tablet which is being tested in a Phase 1 study and that we plan to use in a Phase 2 study to reduce MBD. The Phase 2 study is scheduled to start in the fourth quarter and should be completed by mid-2020. We completed the quarter with $17.1 million in cash, which will enable us to continue to make clinical progress with our programs."

Recent Developments 

Recent developments include the following:

  • July 2019 – Provided update on expanded access program, which now allows physicians and patients to visit the company website to obtain information on compassionate use access
  • July 2019 – Initiated a Phase 1 study of our proprietary modified-release oral Endoxifen tablet
  • June 2019 – Successfully reached the primary endpoint of MBD reduction using the topical formulation of Endoxifen in a Phase 2 study

Q2 2019 Financial Results 

For the three and six months ended June 30, 2019 and 2018, we have no source of sustainable revenue and no associated cost of revenue.

Total operating expenses were approximately $7,286,000 and $11,350,000 for the three and six months ended June 30, 2019, respectively, consisting of research and development (R&D) expenses of approximately $2,612,000 and $4,063,000 respectively, and general and administrative (G&A) expense of approximately $4,674,000 and $7,287,000, respectively. Total operating expenses were approximately $4,143,000 and $6,017,000 for the three and six months ended June 30, 2018, respectively, consisting of research and development expenses of approximately $1,468,000 and $1,939,000, respectively, and general and administrative expenses of approximately $2,675,000 and $4,078,000, respectively.

R&D expenses for the three months ended June 30, 2019, were approximately $2,612,000, an increase of approximately $1,144,000 or 78% from total R&D expenses for the three months ended June 30, 2018 of approximately $1,468,000. R&D expenses for the six months ended June 30, 2019, were approximately $4,063,000, an increase of approximately $2,124,000 or 110% from total R&D expenses for the six months ended June 30, 2018 of approximately $1,939,000.  The increase in R&D expenses for the period ended June 30, 2019, is mainly attributed to an increase in stock-based compensation expense (non-cash). We expect our R&D expenses to increase throughout 2019 as we commence an additional Phase 2 clinical study of oral Endoxifen, develop and manufacture our modified release tablet form of oral Endoxifen, continue our clinical trial of Fulvestrant administered via our intraductal technology and continue the development of other indications and therapeutics, including CAR-T and immunotherapies administered via our intraductal technologies.

G&A expenses were approximately $4,674,000 for the three months ended June 30, 2019, an increase of approximately $1,999,000, or 75% from the total G&A expenses for the three months ended June 30, 2018, of approximately $2,675,000. G&A expenses were approximately $7,287,000 for the six months ended June 30, 2019, an increase of approximately $3,209,000, or 79% from the total G&A expenses for the six months ended June 30, 2018, of approximately $4,078,000. 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 the period ended June 30, 2019, is mainly attributed to an increase in stock-based compensation expense (non-cash). Additionally, payroll expenses have increased resulting from salary increases over the prior year.

As of June 30, 2019, Atossa had approximately $17.1 million in cash and cash equivalents and working capital of approximately $17.4 million.

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.
CONDENSED CONSOLIDATED BALANCE SHEETS

    As of
June 30,
      As of  
    2019     December 31,  
Assets   (Unaudited)     2018  
Current assets                
Cash and cash equivalents   $ 17,058,527     $ 10,380,493  
Restricted cash     110,000       110,000  
Prepaid expenses     813,168       509,833  
Research and development tax rebate receivable     406,306       518,098  
Other current assets     140       30,942  
Total current assets     18,388,141       11,549,366  
                 
Furniture and equipment, net     44,174       54,487  
Intangible assets, net     83,958       99,375  
Right-of-use asset     75,822       -  
Other assets     17,218       17,218  
Total Assets   $ 18,609,313     $ 11,720,446  
                 
Liabilities and Stockholders' Equity                
Current liabilities                
Accounts payable   $ 318,266     $ 353,328  
Accrued expenses     53,485       177,074  
Payroll liabilities     589,445       935,070  
Stock-based compensation liability     -       1,410,025  
Lease liability     51,795       -  
Other current liabilities     19,838       39,939  
Total current liabilities     1,032,829       2,915,436  
Long term liabilities                
Lease liability long term     24,027       -  
Total Liabilities     1,056,856       2,915,436  
                 
Commitments and contingencies                
                 
Stockholders' equity                
Preferred stock - $0.001 par value; 10,000,000 shares authorized; 676 and 2,379
shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
    1       2  
Additional paid-in capital- Series B convertible preferred stock     675,999       2,378,997  
Common stock - $0.18 par value; 175,000,000 shares authorized, and 9,129,563 and
5,846,552 shares issued and outstanding, as of June 30, 2019 and December 31, 2018, respectively
    1,643,309       1,052,372  
Additional paid-in capital     103,400,247       82,204,902  
Accumulated deficit     (88,167,099 )     (76,831,263 )
Total Stockholders' Equity     17,552,457       8,805,010  
                 
Total Liabilities and Stockholders' Equity   $ 18,609,313     $ 11,720,446  
                 


ATOSSA GENETICS INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

    For the Three Months
Ended June 30,
    For the Six Months
Ended June 30,
   
          2018           2018  
    2019     (as restated)     2019     (as restated)  
                                 
Operating expenses                                
Research and development   $ 2,611,948     $ 1,467,736     $ 4,063,184     $ 1,938,712  
General and administrative     4,674,121       2,674,920       7,287,214       4,078,385  
Total operating expenses     7,286,069       4,142,656       11,350,398       6,017,097  
Operating loss     (7,286,069 )     (4,142,656 )     (11,350,398 )     (6,017,097 )
Other income     23,540       79       14,562       138  
Loss before income taxes     (7,262,529 )     (4,142,577 )     (11,335,836 )     (6,016,959 )
Income taxes     -       -       -       -  
Net loss   $ (7,262,529 )   $ (4,142,577 )   $ (11,335,836 )   $ (6,016,959 )
Deemed dividends attributable to preferred stock     -       (11,479,308 )     -       (11,479,308 )
Net loss applicable to common shareholders   $ (7,262,529 )   $ (15,621,885 )   $ (11,335,836 )   $ (17,496,267 )
Loss per common share - basic and diluted   $ (0.80 )   $ (5.08 )   $ (1.44 )   $ (6.11 )
Weighted average shares outstanding - basic and diluted     9,126,153       3,073,803       7,852,907       2,864,033