Atossa Genetics Announces 2015 Financial Results and Provides Company Update

SEATTLE, WA--(Marketwired - Mar 30, 2016) - Atossa Genetics Inc. (NASDAQ: ATOS) today announced 2015 financial results and provided an update on recent company developments. 

Steve Quay, President and CEO, commented, "2015 was a transitional year for us as we shifted our focus to becoming a Phase 2 drug development company and are now developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions. Our leading program uses our patented intraductal microcatheters, which deliver locally-administered pharmaceuticals through the breast ducts. We are pleased to have recently commenced our Phase 2 clinical study in March 2016 using our microcatheters to deliver fulvestrant as a potential treatment of ductal carcinoma in-situ, or DCIS, and breast cancer."

"We are also in the process of identifying an additional drug candidate to enhance our business and drive shareholder value. We are optimistic about our new focus and opportunities as we proceed in 2016," continued Dr. Quay.

Recent Corporate Developments

Atossa's important recent developments include the following:

• Opened First Phase 2 Clinical Trial of Intraductal Fulvestrant Administration in Women with DCIS or Breast Cancer in the United States, which is Called the '007 Trial
  
  
• Completed Sale of Wholly-Owned Subsidiary, The National Reference Laboratory for Breast Health, Inc., or the NRLBH
  
  
• Entered into a Manufacturing Agreement with AAIPharma/Cambridge Major Laboratories for the Active Ingredient in Afimoxifene Topical Gel, or AfTG
  
  
• Acquired Ductal Lavage Specimen Bank From the Dr. Susan Love Research Foundation
  
  
• Raised Approximately $6,220,000 in June 2015 From Institutional Healthcare Investors
  
  
• Raised Approximately $2.2 Million in Working Capital through the Sale of Shares to Aspire Capital in the First Quarter of 2016
  
  
• Acquired Rights to Clinical-Stage Proprietary AfTG for Potential Treatment of Hyperplasia of the Breast
  
  

2015 Financial Results  

For the year ended December 31, 2015, substantially all of the revenue we recognized consisted of pharmacogenomics testing by the NRLBH. As a result of the sale of the NRLBH in December 2015, the revenue and cost of revenue are presented as discontinued operations for both years ended 2015 and 2014. The NLRBH had a total net revenue of $5,524,874 for the year ended December 31, 2015, consisting of mainly pharmacogenomics testing. This represents an increase of approximately $5 million from the total net revenue of $525,954 from our ForeCYTE device sales and laboratory testing for the year ended December 31, 2014.

As a result of the sale of the NRLBH, operating expenses related to the NRLBH are presented separately as discontinued operations for both years ended 2015 and 2014.

Total operating expenses from continuing operations were $12,627,965 for the year ended December 31, 2015, consisting of general and administrative (G&A) expenses of $8,842,938, R&D expenses of $2,359,593, and selling expenses of $1,421,409. Operating expenses from continuing operations increased $416,799, or 3%, from $12,211,166 for the year ended December 31, 2014, which consisted of G&A expenses of $8,052,281, R&D expenses of $1,110,329, selling expenses of $695,930, and impairment expenses of $2,352,626. The increase was mainly due to additional costs attributed to the commercialization and launch of our ForeCYTE and FullCYTE devices in EU and the U.S., additional R&D spending on developing our medical devices and costs associated with AfTG drug development.

We incurred $3,002,136 in loss from discontinued operations, which includes $2,331,192 in operating expenses from the NLRBH, $399,394 in exit costs, and $670,943 in loss on disposal of the NLRBH. Operating expenses from discontinued operations are primarily from activities related to the NRLBH operations, which were consistent with 2014 amounts. 

Conference Call Information

Management will host a conference call today, March 30, 2016, at 4:30 pm Eastern Time to review the financial results and recent corporate developments. To listen to the call by phone, interested parties within the U.S. should call 1-866-652-5200 and International callers should call 1-412-317-6060. All callers should ask for the Atossa Genetics conference call. The conference call will also be available through a live webcast at www.atossagenetics.com. Details for the webcast may be found on the Company's IR events page at http://ir.atossagenetics.com/ir-calendar.

A replay of the call will be available approximately one hour after the end of the call through April 30, 2016. The replay can be accessed via Atossa's website or by dialing 877-344-7529 (domestic) or 412-317-0088 (international) or Canada Toll Free at 855-669-9658. The replay conference ID number is 10083273.

About Atossa Genetics

Atossa Genetics Inc. is a clinical-stage pharmaceutical 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 actions and inactions by the FDA, the outcome or timing of regulatory approvals needed by Atossa, lower than anticipated rate of patient enrollment, results of clinical studies, 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, such as patent rights, 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 Form 10-K and 10-Q, each as amended and supplemented from time to time.

ATOSSA GENETICS, INC.
CONSOLIDATED BALANCE SHEETS
			As of December 31,
			2015				2014
Assets
Current assets:
	Cash and cash equivalents		$	3,715,895			$	8,500,718
	Restricted cash			275,000				-
	Prepaid expenses			193,293				193,964
	Inventory, net			-				9,276
	Other current assets			110,663				-
	Assets of discontinued operations			-				636,239
		Total current assets		4,294,851				9,340,197
	Furniture and equipment, net			171,568				136,693
	Intangible assets, net			1,700,565				1,886,958
	Deferred financing costs			-				351,961
	Other assets			76,337				48,193
		Total assets	$	6,243,321			$	11,764,002
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	814,448			$	513,045
	Accrued expenses			463,676				254,126
	Payroll liabilities			1,159,335				959,741
	Other current liabilities			64,128				42,228
	Liabilities of discontinued operations			-				494,252
		Total current liabilities		2,501,587				2,263,392
	Deferred rent, net of current portion			-				2,483
		Total liabilities		2,501,587				2,265,875
Commitments and contingencies
Stockholders' equity
	Preferred stock - $.001 par value; 10,000,000 shares authorized, 0 shares issued and outstanding			-				-
	Common stock - $.001 par value; 75,000,000 shares authorized, 32,657,257 and 24,564,058 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively			32,657				24,564
	Additional paid-in capital			54,643,940				44,648,103
	Accumulated deficit			(50,934,863	)			(35,174,540	)
		Total stockholders' equity		3,741,734				9,498,127
		Total liabilities and stockholders' equity	$	6,243,321			$	11,764,002

ATOSSA GENETICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
			For the Years Ended December 31,
			2015				2014
Revenue
	Diagnostic testing service		$	-			$	40,138
	Product sales			1,758				-
		Total revenue		1,758				40,138
Cost of revenue
	Product sales			132,411				-
		Total cost of revenue		132,411				-
		Gross profit (loss) from continuing operations		(130,653	)			40,138
Selling expenses				1,421,409				695,930
Research and development expenses				2,359,593				1,110,329
General and administrative expenses				8,846,963				8,052,281
Impairment of intangible assets				-				2,352,626
		Total operating expenses		12,627,965				12,211,166
Operating loss				(12,758,618	)			(12,171,028	)
Other income				431				260
Loss before income taxes				(12,758,187	)			(12,170,768	)
Income taxes				-				-
Loss from continuing operations				(12,758,187	)			(12,170,768	)
Loss from discontinued operations (including loss on disposal of $670,943 for the year ended December 31, 2015)				(3,002,136	)			(2,487,158	)
Net loss			$	(15,760,323	)		$	(14,657,926	)
Loss per common share from continuing operations - basic and diluted			$	(0.45	)		$	(0.51	)
Loss per common share from discontinued operations - basic and diluted			$	(0.10	)		$	(0.10	)
Loss per common share - basic and diluted			$	(0.55	)		$	(0.61	)
Weighted average shares outstanding, basic & diluted				28,427,523				24,038,578