GlobeNewswire Inc | Nov 15, 2021 09:30AM EST

November 15, 2021

SEATTLE, Nov. 15, 2021 (GLOBE NEWSWIRE) -- Atossa Therapeutics, Inc. (Nasdaq: ATOS), a clinical-stage biopharmaceutical company seeking to develop innovative proprietary medicines in oncology and infectious disease with a current focus on breast cancer and COVID-19, today announces financial results for the fiscal quarter ended September 30, 2021, and provides an update on recent company developments.

Key developments from Q3 2021 and to date include:

-- Began to enroll participants in its clinical study of AT-H201 in Australia. The nebulized formulation, AT-H201, is being developed as an inhalation therapy for moderately to severely ill hospitalized COVID-19 patients and for long-haul patients with post-infection pulmonary disease. -- Received authorization from Swedish regulators to initiate a Phase 2 clinical study of Endoxifen to assess safety and pharmacodynamics in women with mammographic breast density (MBD). -- Scheduled a pre-IND meeting with the U.S. FDA to obtain input on the potential clinical and regulatory pathway for use of Atossas Endoxifen to treat breast cancer patients in the neoadjuvant (sometimes called window of opportunity) setting. The meeting is currently scheduled for December 2021.

Our progress in both the Endoxifen and COVID-19 programs, with our initiation of our trial in Australia for AT-H201, and our receipt of regulatory authorization in Sweden to commence an Endoxifen Phase 2 trial, have been key recent milestones, positioning us to move both of these programs forward and take the next steps toward developing therapies in urgent unmet patient needs, said Dr. Steven Quay, Atossas President and Chief Executive Officer.

Further, our strong balance sheet will continue to facilitate our development plans as we not only execute on these trials but also explore additional options that could create significant shareholder value, concluded Dr. Quay.

Quarter Ended September 30, 2021, Financial Results

For the quarter ended September 30, 2021, Atossa has no source of sustainable revenue and no associated cost of revenue.

As of September 30, 2021, the Company had cash, cash equivalents and restricted cash of approximately $140 million.

Operating Expenses Total operating expenses were approximately $5,159,000 and $15,693,000 for the three and ninemonthsended September30, 2021, respectively, consistingof research and development ("R&D") expenses of approximately $2,206,000 and $7,383,000 respectively, and general and administrative ("G&A") expenses of approximately $2,952,000 and $8,310,000, respectively. Total operating expenses were approximately $3,509,000 and $10,382,000, respectively for the three and ninemonth ended September30, 2020,and consisted of R&D expenses of approximately $1,659,000 and $4,251,000, respectively,and G&A expenses of approximately $1,850,000 and $6,131,000respectively. Total operating expenses for the three and ninemonths ended September30, 2021 as compared to the same period in 2020 increased approximately $1,650,000and $5,311,000or 47% and 51%, respectively. The basis for the increasedoperating expenses in 2021is explained below.

Research and Development ExpensesR&D expenses for the three months ended September30, 2021, were approximately $2,206,000, an increase of approximately $547,000or 33% from total R&D expenses for the three months ended September30, 2020, of approximately$1,659,000.The increase of approximately $547,000 for the three month period is attributed to an increase in clinical trial expense of approximately $81,000, an increase in compensation of approximately $380,000 driven by non-cash stock-based compensation and an increase in R&D professional fees of approximately $82,000.R&D expenses for the ninemonths ended September30, 2021, were approximately $7,383,000, an increase of approximately $3,132,000or 74% from total R&D expenses for the ninemonths ended September30, 2020, of approximately $4,251,000.The increase in R&D expense for the nine months ended September 30, 2021, is attributed primarily to an increase in clinical trial expense of approximately $1,390,000 and an increase in compensationof approximately $591,000 due primarily to non-cash stock-based compensation andthe addition of twoemployees, as compared to the same period in 2020. Also included in R&D expenses is an increase of $1,000,000attributable to a one-time fee we paid in June 2021 to a U.S.leading research institutionfor the exclusive right to negotiate for the acquisition of the world-wide rights to two oncology R&D programs. Those negotiationsare ongoing, and no assurance can be given that they will lead to a definitive agreement.We expect our R&D expenses to continue to increase through2021 as we have commenced a clinical studyof AT-H201,completestudiesof AT-301, launch a Phase 2 clinicaltrialof Endoxifen in women with high breast density, and continue the development of other indications and therapeutics.

General and Administrative Expenses G&A expenses were approximately $2,952,000 for the three monthsended September30, 2021, an increase of approximately $1,102,000, or 60% from the total G&A expenses for the three monthsended September30, 2020, of approximately $1,850,000. The increase of approximately $1,102,000 for the three-month period is attributed to an increase in insurance costs of approximately $192,000 due to additional COVID-19 clinical trials and an increase in compensation of approximately $900,000 due primarily to non-cash stock-based compensation. G&Aexpenses for the ninemonths ended September 30, 2021, were approximately $8,310,000, an increase of approximately $2,179,000 or 36% from total G&Aexpenses for the ninemonths ended September30, 2020, of approximately $6,131,000. The increasein G&A expenses for the ninemonthsended September30, 2021,is attributedto an increase in insurance costs of approximately $578,000 due to the addition of theCOVID-19 clinical trials,professional fees of approximately $742,000 due primarily to increased proxy costsand increased compensation of approximately $1,070,000 resulting primarily from increased headcount and increased non-cash stock-based compensation,offset by a reduction in legal fees of approximately $343,000 compared to the same period in 2020. G&A expenses consist primarily of personnel and related benefit costs, facilities, professional services, insurance, and public company related expenses.

About Atossa Therapeutics

Atossa Therapeutics, Inc. is a clinical-stage biopharmaceutical company seeking to discover and develop innovative medicines in oncology and infectious diseases with a current focus on breast cancer and COVID-19. 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 interim 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 of AT-H201, AT-301 and Endoxifen, lower than anticipated rate of patient enrollment, estimated market size of drugs under development, the safety and efficacy of Atossas products, performance of clinical research organizations and investigators, obstacles resulting from proprietary rights held by others such as patent rights, whether reduction in Ki-67 or any other result from a neoadjuvant study is an approvable endpoint for oral Endoxifen, and other risks detailed from time to time in Atossas filings with the Securities and Exchange Commission, including without limitation its periodic reports on Form 10-K and 10-Q, each as amended and supplemented from time to time.

Company Contact:Atossa Therapeutics, Inc.Kyle Guse CFO and General CounselOffice: (866) 893-4927kyle.guse@atossainc.com

Investor Relations Contact:Core IROffice: (516) 222-2560ir@atossainc.com

Source: Atossa Therapeutics, Inc.



ATOSSA THERAPEUTICS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS

As of September As of December 30, 2021 31,Assets (Unaudited) 2020 Current assets Cash and cash equivalents $ 140,040,955 $ 39,553,671 Restricted cash 110,000 110,000 Prepaid expenses 1,883,197 1,813,902 Research and development tax rebate 934,672 634,940 receivableOther current assets 18,060 657,662 Total current assets 142,986,884 42,770,175 Furniture and equipment, net 22,138 20,632 Intangible assets, net - 13,375 Right-of-use asset 1,217 18,053 Other assets 13,408 17,218 Total Assets $ 143,023,647 $ 42,839,453 Liabilities and Stockholders' EquityCurrent liabilities Accounts payable $ 667,988 $ 1,588,613 Accrued expenses 75,695 93,367 Payroll liabilities 912,670 963,665 Common stock warrant liability - 13,003,075 Lease liability 1,217 18,053 Other current liabilities 18,251 4,748 Total current liabilities 1,675,821 15,671,521 Total Liabilities 1,675,821 15,671,521 Commitments and contingencies Stockholders' equity Preferred stock - $0.001 par value;10,000,000 shares authorized; 584and 621 shares issued and 1 1 outstanding as of September 30,2021 and December 31, 2020,respectivelyAdditional paid-in capital - Series 583,999 620,999 B convertible preferred stockCommon stock - $0.18 par value;175,000,000 shares authorized;126,623,541 and 47,548,835 shares 22,792,225 8,558,778 issued and outstanding as ofSeptember 30, 2021 and December 31,2020, respectivelyAdditional paid-in capital 242,373,694 129,887,146 Accumulated deficit (124,402,093 ) (111,898,992 )Total Stockholders' Equity 141,347,826 27,167,932 Total Liabilities and Stockholders' $ 143,023,647 $ 42,839,453 Equity

ATOSSA THERAPEUTICS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

For the Three Months Ended For the Nine Months Ended September September 30, 30, 2021 2020 2021 2020 Operating expensesResearch and $ 2,206,158 $ 1,659,075 $ 7,383,281 $ 4,250,934 developmentGeneral and 2,952,436 1,849,741 8,309,807 6,130,698 administrativeTotaloperating 5,158,594 3,508,816 15,693,088 10,381,632 expensesOperating loss (5,158,594 ) (3,508,816 ) (15,693,088 ) (10,381,632 )Other income (38,551 ) 17,745 (81,374 ) 36,999 (expense), netLoss before (5,197,145 ) (3,491,071 ) (15,774,462 ) (10,344,633 )income taxesIncome taxes - - - - Net loss $ (5,197,145 ) $ (3,491,071 ) $ (15,774,462 ) $ (10,344,633 )Loss percommon share - $ (0.04 ) $ (0.34 ) $ (0.14 ) $ (1.09 )basic anddilutedWeightedaverage sharesoutstanding - 126,537,544 10,162,770 113,689,961 9,496,222 basic anddiluted