Full Press Release Details
Atossa Genetics Reports Third Quarter
2013 Results and Provides Company Update
Announces Second Common Stock Purchase
Agreement with Aspire Capital for up to $25 Million
Seattle, November 12, 2013 - Atossa Genetics, Inc.
(NASDAQ: ATOS), the Breast Health Company , today announced third quarter 2013 financial results and recent corporate developments,
including a new common stock purchase agreement with Aspire Capital, LLC, for the sale of up to $25 million in common stock over
the next 30 months. The previous agreement with Aspire Capital, under which the Company raised $11.3 million in equity funding,
has been terminated by mutual agreement of the parties. This new agreement provides increased funding and more flexible terms
Key aspects of the agreement with Aspire Capital include:
"With cash and cash equivalents of $7.7 million on our
balance sheet at the end of the third quarter and a new financing agreement in place with Aspire Capital, we believe we are well
positioned going into 2014," stated Dr. Steven C. Quay, Chairman, CEO & President. "We are addressing the FDA's
regulatory requirements so that we can resume the national roll out of the ForeCYTE test at the earliest possible date and we look
forward to our pre-510(k) submission meeting this Thursday." Dr. Quay added, "Aspire Capital has become an important
and trusted financial partner. We appreciate their continued confidence in the future of Atossa Genetics and the value in our breast
health products and services."
Dawson James Securities, Inc. was the placement agent in connection
with the new agreement with Aspire Capital. A more complete and detailed description of the transaction is set forth in the Company's
Quarterly Report on Form 10-Q, filed today with the U.S. Securities and Exchange Commission.
Third Quarter 2013 Financial Results
Total revenues for the three months ended September 30, 2013,
were $76,597, consisting of $72,187 of diagnostic service revenue and $4,410 in product sales. This compares to total revenues
of $105,576 for the three months ended September 30, 2012. The decrease in total revenues for the third quarter versus the prior
year third quarter mainly resulted from new programs to increase early adoption of the Company's tests by increasing the
number of complimentary kits and test services, and we provided discounted test services. These programs resulted in a 52% increase
from the second quarter of 2013 to the third quarter of 2013 in the overall number of doctors sending in specimens to Atossa's
laboratory and a 12% increase in the number of specimens sent to Atossa's laboratory in the same period.
Gross profit for the three months ended September 30, 2013,
was $50,659 versus gross profit of $90,499 for the quarter ended September 30, 2012. The decrease in gross profits primarily reflects
the lower revenue in the third quarter of 2013.
Total operating expenses were $3.6 million for the three months
ended September 30, 2013, consisting of G&A expenses of $2.9 million, research and development expenses of $321,111 and selling
expenses of $373,418. This compares to total operating expenses of $1.2 million for the three months ended September 30, 2012,
consisting of G&A expenses of $590,359, research and development expenses of $548,108 and selling expenses of $87,704. The
increase in operating expenses from the third quarter of 2012 to the third quarter of 2013 is mainly attributable to the $2.3 million
increase in G&A expenses.
Selling expenses increased $285,714 from the third quarter of
2012 to the third quarter of 2013 as a result of hiring additional sales and marketing personnel, incurring additional marketing
expenses and adding to the Company's distributors for the national launch of the ForeCYTE test. Research and development
expenses decreased by $226,997 from the third quarter of 2012 to the third quarter of 2013 as a result of substantial completion
of the development of the ForeCYTE test and ArgusCYTE test in 2012 and Atossa's focus in 2013 on the national launch of ForeCYTE.
Net loss for the quarter ended September 30, 2013, was $3.5
million, or $0.22 per share, compared with net loss of $1.1 million, or $0.10 per share, for the third quarter ended September
30, 2012. The increase in net loss was primarily attributable to an increase in general and administrative expense, including increased
expenses related to the national launch of the ForeCYTE test.
At September 30, 2013, Atossa Genetics had cash and cash equivalents
of $7.7 million versus $1.7 million at December 31, 2012.
Corporate Developments
Conference Call Information
Management will host a conference call today, November 12,
2013, at 4:45 pm Eastern Time to review only the financial results, the new financing facility and our pipeline. To listen to
the call by phone, interested parties within the U.S. may dial 866-652-5200 or 412-317-6060 for international callers. All callers
should ask for the Atossa Genetics conference call. The conference call will also be available through a live webcast at http://services.choruscall.com/links/atossa131107.html.
A replay of the call will be available one hour after the end
of the call through December 12, 2013, and can be accessed via Atossa's website or by dialing 877-344-7529 (domestic) or
412-317-0088 (international). The replay conference ID number is10036358.
About Atossa Genetics
Atossa Genetics, Inc. is focused on proprietary products and
services related to breast health through the commercialization of medical devices and, through its wholly-owned subsidiary, The
National Reference Laboratory for Breast Health, Inc., laboratory services and tests. For additional information, please visit
Forward-Looking Statements
Forward-looking statements in this press release 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 by the FDA, the outcome or timing of regulatory clearances needed
by Atossa to sell its products, responses to regulatory matters, Atossa's ability to continue to manufacture and sell its products,
recalls of products, the efficacy of Atossa's products and services, the market demand for and acceptance of Atossa's products
and services, performance of distributors, estimated future expenses and cash needs, 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.
CFO and General Counsel
Matthew D. Haines (Investors and Media)
ATOSSA GENETICS INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 7,693,561 | $ | 1,725,197 | ||||
| Accounts receivable, net | 299,338 | 141,665 | ||||||
| Prepaid expense | 559,386 | 122,633 | ||||||
| Retainers (deposits) | 43,160 | - | ||||||
| Total Current Assets | 8,595,445 | 1,989,495 | ||||||
| Fixed Assets | ||||||||
| Furniture and equipment, net | 443,272 | 159,967 | ||||||
| Total Fixed Assets | 443,272 | 159,967 | ||||||
| Other Assets | ||||||||
| Security deposit | 36,446 | 36,447 | ||||||
| Intangible assets, net | 4,407,058 | 4,640,224 | ||||||
| Total Other Assets | 4,443,504 | 4,676,671 | ||||||
| Total Assets | $ | 13,482,221 | $ | 6,826,133 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 31,131 | $ | 68,217 | ||||
| Accrued expenses | 1,069,759 | 1,374,385 | ||||||
| Deferred rent | 60,753 | - | ||||||
| Payroll liabilities | 357,489 | 207,996 | ||||||
| Contingent liabilities | 402,840 | - | ||||||
| Other current liabilities | 20,300 | - | ||||||
| Total Current Liabilities | 1,942,272 | 1,650,598 | ||||||
| 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, 17,444,824 and 12,919,367 shares issued and outstanding | 17,445 | 12,919 | ||||||
| Additional paid-in capital | 29,281,396 | 14,894,522 | ||||||
| Accumulated deficit | (17,758,892 | ) | (9,731,906 | ) | ||||
| Total Stockholders' Equity | 11,539,949 | 5,175,535 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 13,482,221 | $ | 6,826,133 |
ATOSSA GENETICS INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended September 30, | For The Nine Months Ended September 30, | From April 30, 2009 (Inception) Through September 30, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Diagnostic testing service | $ | 72,187 | $ | 104,011 | $ | 361,905 | $ | 376,696 | $ | 837,307 | ||||||||||
| Product sales | 4,410 | 1,565 | 223,440 | 6,690 | 231,380 | |||||||||||||||
| Total Revenue | 76,597 | 105,576 | 585,345 | 383,386 | 1,068,687 | |||||||||||||||
| Cost of Revenue | ||||||||||||||||||||
| Diagnostic testing service | 25,938 | 9,000 | 75,893 | 29,985 | 111,638 | |||||||||||||||
| Product sales | - | - | 238,669 | - | 243,833 | |||||||||||||||
| Total Cost of Revenue | 25,938 | 9,000 | 314,562 | 29,985 | 355,471 | |||||||||||||||
| Loss on reduction of inventory to LCM | - | 6,077 | - | 29,884 | 121,910 | |||||||||||||||
| Gross Profit | 50,659 | 90,499 | 270,783 | 323,517 | 591,306 | |||||||||||||||
| Selling expenses | 373,418 | 87,704 | 965,383 | 281,971 | 1,605,259 | |||||||||||||||
| Research and development expenses | 321,111 | 548,108 | 731,258 | 1,508,944 | 4,288,644 | |||||||||||||||
| General and administrative expenses | 2,858,027 | 590,359 | 6,600,819 | 1,896,254 | 12,423,155 | |||||||||||||||
| Total operating expenses | 3,552,556 | 1,226,171 | 8,297,460 | 3,687,169 | 18,317,058 | |||||||||||||||
| Operating Loss | (3,501,897 | ) | (1,135,672 | ) | (8,026,677 | ) | (3,363,652 | ) | (17,725,752 | ) | ||||||||||
| Interest income | 53 | 46 | 53 | 1,219 | 6,641 | |||||||||||||||
| Interest expense | 1 | 7,756 | 360 | 11,816 | 39,531 | |||||||||||||||
| Net Loss before Income Taxes | (3,501,845 | ) | (1,143,382 | ) | (8,026,984 | ) | (3,374,249 | ) | (17,758,642 | ) | ||||||||||
| Income Taxes | - | - | - | - | 250 | |||||||||||||||
| Net Loss | $ | (3,501,845 | ) | $ | (1,143,382 | ) | $ | (8,026,984 | ) | $ | (3,374,249 | ) | $ | (17,758,892 | ) | |||||
| Loss per common share - basic and diluted | $ | (0.22 | ) | $ | (0.10 | ) | $ | (0.55 | ) | $ | (0.30 | ) | $ | (1.95 | ) | |||||
| Weighted average shares outstanding, basic & diluted | 15,830,033 | 11,256,867 | 14,697,221 | 11,256,867 | 9,127,656 |