UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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, 2020 OR ☐ 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 June 30, 2020 OR ☐ 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 (Stat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 March 31, 2020 OR ☐ 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 (Sta ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Atossa Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for breast cancer and other breast conditions, with a lead program in oral Endoxifen - The company's lead program is the development of Endoxifen to treat and prevent breast cancer, with a primary goal of developing an oral form to reduce mammographic breast density (MBD)[16](index=16&type=chunk) - A Phase 2 double-blinded, placebo-controlled study of oral Endoxifen in approximately **1,000 pre-menopausal women** with MBD was contracted in December 2019[16](index=16&type=chunk) - Atossa is also developing a proprietary intraductal delivery technology to target therapies, including fulvestrant and CAR-T, directly to the site of breast cancer; a Phase 2 study delivering fulvestrant via this method is being conducted by Johns Hopkins University[17](index=17&type=chunk)[43](index=43&type=chunk) - The company estimates the potential U.S. market for its Endoxifen programs at up to **$1 billion annually** and for intraductal administration of drugs like fulvestrant at up to **$800 million annually**[48](index=48&type=chunk) Research and Development Expenses (2018-2019) | Year | R&D Expenses (USD) | | :--- | :--- | | 2019 | $6,645,417 | | 2018 | $4,209,981 | - As of February 29, 2020, the company owns **6 issued U.S. patents** and has **40 pending patent applications** related to its Endoxifen, Fulvestrant, and CAR-T programs[55](index=55&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks, including a limited operating history, recurring net losses, and significant doubt about its ability to continue as a going concern without securing additional capital - The company has a history of recurring losses and an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern without obtaining adequate capital[116](index=116&type=chunk) - Existing resources are expected to be sufficient to fund operations for only the next **six to nine months**, necessitating additional capital raising[118](index=118&type=chunk)[119](index=119&type=chunk) - The development of pharmaceutical products is highly uncertain; promising compounds may fail in later-stage clinical trials due to safety, efficacy, manufacturing, or other issues[135](index=135&type=chunk)[136](index=136&type=chunk) - The company is dependent on third parties for critical operations, including manufacturing (cGMP), clinical trials (GCP), and distribution; failure by these parties to perform could significantly harm the business[156](index=156&type=chunk)[157](index=157&type=chunk)[160](index=160&type=chunk) - The company's common stock has traded below the **$1.00 minimum bid price** requirement for NASDAQ, posing a risk of delisting[211](index=211&type=chunk) - The global spread of the coronavirus (COVID-19) could adversely impact operations, including interrupting the drug supply chain, delaying clinical trial enrollment, and affecting access to capital[238](index=238&type=chunk) [Unresolved Staff Comments](index=44&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that this item is not applicable, indicating there are no unresolved comments from the SEC staff - Not applicable[240](index=240&type=chunk) [Properties](index=44&type=section&id=Item%202.%20Properties) As of December 31, 2019, Atossa Therapeutics leases approximately 202 square feet of office space in Seattle, Washington, believing these facilities are adequate for its needs for the next eight months - The company leases approximately **202 square feet** of office space in Seattle, Washington[241](index=241&type=chunk) [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20Proceedings) The company states it is not currently a party to any material legal proceedings; a prior securities class action lawsuit was settled and approved by the court in July 2018, with the settlement amount fully funded by insurers - The company is not currently a party to any material legal proceedings[242](index=242&type=chunk) - A securities class action complaint filed in 2013 was settled in 2018 for **$3.5 million**, which was completely funded by the defendants' insurers; the case is considered closed[127](index=127&type=chunk)[380](index=380&type=chunk) [Mine Safety Disclosure](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This section is not applicable to the company's business operations - Not applicable[244](index=244&type=chunk) Part II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock is traded on The NASDAQ Capital Market under the symbol 'ATOS'; as of March 24, 2020, there were approximately 33 stockholders of record, and the company has never paid cash dividends nor plans to in the foreseeable future - Common stock trades on The NASDAQ Capital Market under the symbol '**ATOS**'[245](index=245&type=chunk) - As of March 24, 2020, there were approximately **33 stockholders of record** and approximately **16,000 beneficial holders**[246](index=246&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the future[247](index=247&type=chunk) [Selected Financial Data](index=45&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not applicable as the company qualifies as a smaller reporting company - Not applicable[247](index=247&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For the year ended December 31, 2019, Atossa had no revenue and incurred a net loss of **$17.2 million**, a significant increase from the **$11.4 million** loss in 2018, driven by a **51% increase** in operating expenses primarily from non-cash stock-based compensation; with **$12.6 million** in cash at year-end, management states there is substantial doubt about its ability to continue as a going concern, as funds are projected to last only **six to nine months** Comparison of Operating Results (2019 vs. 2018) | Metric | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $0 | $0 | N/A | | R&D Expenses | $6,645,000 | $4,210,000 | +58% | | G&A Expenses | $10,620,000 | $7,224,000 | +47% | | Total Operating Expenses | $17,265,000 | $11,434,000 | +51% | | Net Loss | $(17,239,777) | $(11,404,934) | +51% | - The increase in both R&D and G&A expenses in 2019 was primarily attributed to non-cash stock-based compensation charges related to the cancellation of 2018 liability options and the grant of replacement options in 2019[264](index=264&type=chunk)[265](index=265&type=chunk) - As of December 31, 2019, the company had **$12.6 million** in cash and cash equivalents; management believes these funds will only be sufficient to finance operations for **six to nine months**, raising substantial doubt about the company's ability to continue as a going concern[266](index=266&type=chunk) Cash Flow Summary (2019 vs. 2018) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Used in Operating | $(9,128,000) | $(8,962,000) | | Net Cash Provided by Financing | $11,337,000 | $12,291,000 | [Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Not applicable[282](index=282&type=chunk) [Financial Statements and Supplementary Data](index=53&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for the fiscal years ended December 31, 2019 and 2018, with the independent auditor's report highlighting a 'Going Concern Uncertainty' due to recurring losses and an accumulated deficit - The independent auditor's report includes a paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to recurring losses from operations and an accumulated deficit[299](index=299&type=chunk) Consolidated Balance Sheet Data (as of Dec 31) | Account | 2019 | 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $12,581,136 | $10,380,493 | | Total Assets | $14,489,855 | $11,720,446 | | Total Liabilities | $1,333,850 | $2,915,436 | | Total Stockholders' Equity | $13,156,005 | $8,805,010 | Consolidated Statement of Operations Data (for year ended Dec 31) | Account | 2019 | 2018 | | :--- | :--- | :--- | | Operating loss | $(17,265,425) | $(11,434,233) | | Net loss | $(17,239,777) | $(11,404,934) | | Net loss per share (basic and diluted) | $(2.03) | $(5.50) | - In March 2019, the company received approximately **$11.3 million** from the exercise of **2.8 million warrants** issued in a 2018 financing[362](index=362&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=53&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports that there were no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[282](index=282&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2019, with a material weakness identified in June 2018 related to the accounting for a deemed dividend remediated during 2019 - Management concluded that the Company's disclosure controls and procedures were effective as of December 31, 2019[283](index=283&type=chunk) - A material weakness identified in Q2 2018 concerning the calculation of a deemed dividend on Series B preferred stock was remediated as of December 31, 2019[286](index=286&type=chunk)[288](index=288&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019[285](index=285&type=chunk) [Other Information](index=54&type=section&id=Item%209B.%20Other%20Information) The company reports no information for this item - None[288](index=288&type=chunk) Part III Part III of the report, encompassing Items 10 through 14, incorporates information by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders [Directors, Executive Officers and Corporate Governance](index=55&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement[291](index=291&type=chunk) [Executive Compensation](index=55&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information regarding executive compensation is incorporated by reference from the 2020 Proxy Statement[292](index=292&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=55&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information regarding security ownership is incorporated by reference from the 2020 Proxy Statement[292](index=292&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=55&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information regarding related party transactions and director independence is incorporated by reference from the 2020 Proxy Statement[293](index=293&type=chunk) [Principal Accounting Fees and Services](index=55&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information regarding principal accounting fees and services is incorporated by reference from the 2020 Proxy Statement[293](index=293&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=55&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report - This item lists the financial statements and exhibits filed with the 10-K, including the auditor's consent, certifications, and various corporate agreements[294](index=294&type=chunk)[295](index=295&type=chunk) [Form 10-K Summary](index=55&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section is not applicable - Not applicable[295](index=295&type=chunk)