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 26, 2020

 

Atossa Therapeutics, 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. ☐

 

 

 

Securities registered pursuance to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.18 par value

ATOS

NASDAQ

 

 

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On March 26, 2020, Atossa Therapeutics, Inc. (the “Company”) issued a press release announcing year end December 31, 2019 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 26, 2020

 

 

 

* * *

 

 

 

 

 

 

 

 

 

 

 

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 26, 2020

Atossa Therapeutics, 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 26, 2020

 

 

 

 

 

ex_178149.htm

 

Exhibit 99.1

 

 

 

Atossa Therapeutics Announces Fourth Quarter and Year End 2019 Financial Results and Provides Company Update

 

SEATTLE, March 26, 2020 (GLOBENEWSWIRE) -- Atossa Therapeutics, Inc. (Nasdaq: 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 fourth quarter and year ended December 31, 2019 and provides an update on recent company developments.

 

“We are very proud of our 2019 accomplishments, as we focused on developing our proprietary drug Endoxifen to reduce mammographic breast density (MBD) and to treat breast cancer in the ‘window of opportunity’ - after a patient is diagnosed but before her surgery,” said Dr. Steven Quay, Atossa’s President and Chief Executive Officer. “We have received positive data from the expanded access (or, ‘compassionate-use’) patient taking our oral Endoxifen and from our Phase 2 study of our topical Endoxifen to reduce MBD, all while minimizing costs and managing our cash position.”

 

Key strategic highlights for 2019 included:

 

 

Completed additional Phase 1 work with our proprietary oral Endoxifen.

 

Contracted with South General Hospital in Stockholm, Sweden to conduct a Phase 2 study with oral Endoxifen to reduce MBD.

 

Continued Phase 2 study underway in Australia administering our oral Endoxifen to newly diagnosed breast cancer patients in the “window of opportunity.”

 

In developing topical Endoxifen, Phase 2 studies showed significant and rapid reduction of MBD.

 

Received favorable results from our single-patient expanded access program: the Ki-67 activity decreased by 50%, and the estrogen receptor content decreased by more than 20% with no safety or tolerability issues, including vasomotor symptoms such as hot flashes and night sweats.

 

Received IRB approval for a Phase 2 clinical study using our intraductal microcatheter technology to administer fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS) at a major institution.

 

Recent Corporate Developments 

 

Recent developments include the following:

 

Changed the name of the company from Atossa Genetics to Atossa Therapeutics, which we believe more clearly reflects our focus on developing therapies and continues to honor Princess Atossa, the great queen of the Achaemenid Empire who reigned in the fifth century BCE and who is the earliest recorded woman with breast cancer.

 

Submitted an application to initiate a Phase 2 study of our oral Endoxifen for the reduction of MBD to the Swedish Medical Product Agency and the Institutional Review Board.

 

Announced that we will meet with the U.S. F.D.A. on April 30, 2020. The objective of this meeting is to discuss the clinical development of oral Endoxifen to reduce MBD.

 

1

 

2019 Financial Results 

 

For the years ended December 31, 2019 and 2018, we have no source of sustainable revenue and no associated cost of revenue.

 

Operating Expenses: Total operating expenses were $17.3 million for the year ended December 31, 2019, which is an increase of $5.8 million, or 51%, from the year ended December 31, 2018. Operating expenses for 2019 consisted of research and development (R&D) expenses of $6.6 million and general and administrative (G&A) expenses of $10.6 million. Operating expenses for 2018 consisted of R&D expenses of $4.2 million, and G&A expenses of $7.2 million.

    

Research and Development Expenses: R&D expenses for the year ended December 31, 2019, were $6.6 million, an increase of $2.4 million, or 58%, from total R&D expenses in 2018 of $4.2 million. The increase in R&D expense is attributed to non-cash stock-based compensation, salaries and clinical trial expenses associated with our Endoxifen program. R&D stock-based compensation expense, which is a non-cash charge, increased approximately $2.3 million during 2019 resulting from the cancellation of certain 2018 options and the 2019 replacement grant of options that were 75% vested and that were granted at fair market value on the date approval by the Board of Directors but were in-the-money on the date they were subsequently approved by the stockholders. There were no option cancellations or in-the-money option grants in the comparable period of 2018. Clinical trial expenses also increased by approximately $250,000 over the same period in 2018. 

 

General and Administrative Expenses: G&A expenses were $10.6 million for the year ended December 31, 2019, an increase of $3.4 million, or 47% from the total G&A expenses for the year ended December 31, 2018, of $7.2 million. 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 year ended December 31, 2019, is attributed to non-cash stock-based compensation. G&A stock-based compensation expense, which is a non-cash charge, increased approximately $4.0 million during 2019 resulting from the cancellation of certain 2018 options and the 2019 replacement grant of options that were 75% vested and that were granted at fair market value on the date of approval by the Board of Directors but were in-the-money on the date they were subsequently approved by the stockholders. There were no option cancellations or in-the-money option grants in the comparable period of 2018. The increase in 2019 expense G&A expense was offset by a reduction in bonus compensation expense of approximately $350,000 as a one-time 2018 bonus was not paid in 2019.

 

As of December 31, 2019, the Company had approximately $12.6 million in cash and cash equivalents and working capital of approximately $13.0 million.

 

About Atossa Therapeutics

 

Atossa Therapeutics, 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.atossatherapeutics.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.

 

Company Contact:
Atossa Therapeutics, Inc.
Kyle Guse CFO and General Counsel
Office: 866 893-4927
kyle.guse@atossainc.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 Therapeutics, Inc.

 

 

2

 

ATOSSA THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

As of December 31,

 

 

As of December 31,

 

Assets

 

2019

 

 

2018

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,581,136

 

 

$

10,380,493

 

Restricted cash

 

 

110,000

 

 

 

110,000

 

Prepaid expenses

 

 

862,344

 

 

 

509,833

 

Research and development tax rebate receivable

 

 

739,656

 

 

 

518,098

 

Other current assets

 

 

26,130

 

 

 

30,942

 

Total current assets

 

 

14,319,266

 

 

 

11,549,366

 

 

 

 

 

 

 

 

 

 

Furniture and equipment, net

 

 

34,350

 

 

 

54,487

 

Intangible assets, net

 

 

68,542

 

 

 

99,375

 

Right-of-use asset

 

 

50,479

 

 

 

-

 

Other assets

 

 

17,218

 

 

 

17,218

 

Total Assets

 

$

14,489,855

 

 

$

11,720,446

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

293,171

 

 

$

353,328

 

Accrued expenses

 

 

77,888

 

 

 

177,074

 

Payroll liabilities

 

 

899,420

 

 

 

935,070

 

Stock-based compensation liability

 

 

-

 

 

 

1,410,025

 

Lease liability

 

 

39,371

 

 

 

-

 

Other current liabilities

 

 

12,892

 

 

 

39,939

 

Total current liabilities

 

 

1,322,742

 

 

 

2,915,436

 

Long term liabilities

 

 

 

 

 

 

 

 

Lease liability long term

 

 

11,108

 

 

 

-

 

Total Liabilities

 

 

1,333,850

 

 

 

2,915,436

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock - $0.001 par value; 10,000,000 shares authorized; 671 and 2,379 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively

 

 

1

 

 

 

2

 

Additional paid-in capital - Series B convertible preferred stock

 

 

670,999

 

 

 

2,378,997

 

Common stock - $0.18 par value; 175,000,000 shares authorized, and 9,130,984 and 5,846,552 shares issued and outstanding, as of December 31, 2019 and December 31, 2018, respectively

 

 

1,643,565

 

 

 

1,052,372

 

Additional paid-in capital

 

 

104,912,480

 

 

 

82,204,902

 

Accumulated deficit

 

 

(94,071,040

)

 

 

(76,831,263

)

Total Stockholders' Equity

 

 

13,156,005

 

 

 

8,805,010

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

14,489,855

 

 

$

11,720,446

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

ATOSSA THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

For the Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Research and development

 

$

6,645,417

 

 

$

4,209,981

 

General and administrative

 

 

10,620,008

 

 

 

7,224,252

 

Total operating expenses

 

 

17,265,425

 

 

 

11,434,233

 

Operating loss

 

 

(17,265,425

)

 

 

(11,434,233

)

Other income

 

 

25,648

 

 

 

29,299

 

Loss before income taxes

 

 

(17,239,777

)

 

 

(11,404,934

)

Income taxes

 

 

-

 

 

 

-

 

Net loss

 

$

(17,239,777

)

 

$

(11,404,934

)

Deemed dividends attributable to preferred stock

 

 

-

 

 

 

(11,479,308

)

Net loss applicable to common shareholders

 

$

(17,239,777

)

 

$

(22,884,242

)

Loss per common share - basic and diluted

 

$

(2.03

)

 

$

(5.50

)

Weighted average shares outstanding - basic and diluted

 

 

8,496,964

 

 

 

4,157,746

 

 

4