atos20230930

atos20230930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-35610

ATOSSA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	26-4753208
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

107 Spring Street	98104
Seattle, WA	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (206) 588-0256

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant 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	The Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “a smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.18 par value per share, outstanding as of November 8, 2023, was 125,304,064.

Table of Contents

ATOSSA THERAPEUTICS, INC.
QUARTERLY REPORT

FORM 10-Q

INDEX



PART I. FINANCIAL INFORMATION


ITEM 1.	Condensed Consolidated Financial Statements – Unaudited	3

	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022	4

	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	6

	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	24

ITEM 4.	Controls and Procedures	24

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	25

ITEM 1A.	Risk Factors	25

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

ITEM 3.	Defaults upon Senior Securities	41

ITEM 4.	Mine Safety Disclosures	41

ITEM 5.	Other Information	41

ITEM 6.	Exhibits	42

SIGNATURES		43

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

ATOSSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except for par value)

(Unaudited)

	*As of September 30,*			*As of December 31,*
	*2023*			*2022*
Assets
Current assets
Cash and cash equivalents	$	94,031		$	110,890
Restricted cash		110			110
Prepaid expenses		3,472			4,031
Research and development rebate receivable		28			743
Other current assets		7			2,423
Total current assets		97,648			118,197

Investment in equity securities		1,710			4,700
Other assets		2,337			635
Total Assets	$	101,695		$	123,532

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	718		$	2,965
Accrued expenses		1,261			1,059
Payroll liabilities		1,444			1,525
Other current liabilities		21			19
Total current liabilities		3,444			5,568

Total Liabilities		3,444			5,568

Commitments and contingencies (Note 15)

Stockholders' equity
Series B convertible preferred stock - $0.001 par value; 10,000 shares authorized; 1 share issued and outstanding as of September 30, 2023 and December 31, 2022		-			-
Additional paid-in capital - Series B convertible preferred stock		582			582
Common stock - $0.18 par value; 175,000 shares authorized; 125,304 and 126,624 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		22,792			22,792
Additional paid-in capital - common stock		254,886			250,784
Treasury stock, at cost; 1,320 and 0 shares of common stock at September 30, 2023 and December 31, 2022, respectively		(1,475	)		-
Accumulated deficit		(178,534	)		(156,194	)
Total Stockholders' Equity		98,251			117,964
Total Liabilities and Stockholders' Equity	$	101,695		$	123,532

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

ATOSSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(amounts in thousands, except for per share amounts)

(Unaudited)

	*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*
	*2023*			*2022*			*2023*			*2022*

Operating expenses
Research and development	$	4,467		$	5,160		$	11,680		$	10,097
General and administrative		3,001			3,045			10,678			9,456
Total operating expenses		7,468			8,205			22,358			19,553
Operating loss		(7,468	)		(8,205	)		(22,358	)		(19,553	)
Impairment charge on investment in equity securities		-			-			(2,990	)		-
Interest income		1,274			194			3,107			207
Other expense, net		(35	)		-			(99	)		(123	)
Loss before income taxes		(6,229	)		(8,011	)		(22,340	)		(19,469	)
Income taxes		-			-			-			-
Net loss		(6,229	)		(8,011	)		(22,340	)		(19,469	)
Foreign currency translation adjustment		-			(54	)		-			(54	)
Comprehensive loss		(6,229	)		(8,065	)		(22,340	)		(19,523	)
Loss per share of common stock - basic and diluted	$	(0.05	)	$	(0.06	)	$	(0.18	)	$	(0.15	)
Weighted average shares outstanding - basic and diluted		125,793			126,624			126,344			126,624

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

ATOSSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands)

(Unaudited)

	*Series B Convertible Preferred Stock*						*Common Stock*						*Treasury Stock*
	*Shares*		*Amount*		*Additional Paid-in Capital*		*Shares*		*Amount*		*Additional Paid-in Capital*		*Amount*		*Accumulated Deficit*			*Accumulated Other Comprehensive Loss*			*Total Stockholders' Equity*
Balance at December 31, 2021		1	$	-	$	582		126,624	$	22,792	$	243,996	$	-	$	(129,234	)	$	-		$	138,136
Compensation cost for stock options granted		-		-		-		-		-		1,806		-		-						1,806
Net loss		-		-		-		-		-		-		-		(4,786	)		-			(4,786	)
Balance at March 31, 2022		1	$	-	$	582		126,624	$	22,792	$	245,802	$	-	$	(134,020	)	$	-		$	135,156
Compensation cost for stock options granted		-		-		-		-		-		1,771		-		-						1,771
Net loss		-		-		-		-		-		-		-		(6,672	)		-			(6,672	)
Balance at June 30, 2022		1	$	-	$	582		126,624	$	22,792	$	247,573	$	-	$	(140,692	)	$	-		$	130,255
Compensation cost for stock options granted		-		-		-		-		-		1,666		-		-			-			1,666
Foreign currency translation adjustment		-		-		-		-		-		-		-		-			(54	)		(54	)
Net loss		-		-		-		-		-		-		-		(8,011	)		-			(8,011	)
Balance at September 30, 2022		1	$	-	$	582		126,624	$	22,792	$	249,239	$	-	$	(148,703	)	$	(54	)	$	123,856

	*Series B Convertible Preferred Stock*						*Common Stock*							*Treasury Stock*
	*Shares*		*Amount*		*Additional Paid-in Capital*		*Shares*			*Amount*		*Additional Paid-in Capital*		*Amount*			*Accumulated Deficit*			*Accumulated Other Comprehensive Loss*		*Total Stockholders' Equity*
Balance at December 31, 2022		1	$	-	$	582		126,624		$	22,792	$	250,784	$	-		$	(156,194	)	$	-	$	117,964
Compensation cost for stock options granted		-		-		-		-			-		1,573		-			-			-		1,573
Net loss		-		-		-		-			-		-		-			(6,281	)		-		(6,281	)
Balance at March 31, 2023		1	$	-	$	582		126,624		$	22,792	$	252,357	$	-		$	(162,475	)	$	-	$	113,256
Common stock repurchased		-		-		-		(119	)		-		-		(152	)		-			-		(152	)
Compensation cost for stock options granted		-		-		-		-			-		1,603		-			-			-		1,603
Net loss		-		-		-		-			-		-		-			(9,830	)				(9,830	)
Balance at June 30, 2023		1	$	-	$	582		126,505		$	22,792	$	253,960	$	(152	)	$	(172,305	)	$	-	$	104,877
Common stock repurchased		-		-		-		(1,201	)		-		-		(1,323	)		-			-		(1,323	)
Compensation cost for stock options granted		-		-		-		-			-

SEC Form 10-Q filed by Atossa Therapeutics Inc.