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, 2019 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 GENETICS 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 June 30, 2019 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 GENETICS INC. (Exact name of registrant as specified in its charter) Delaware 26-4753208 (State or ...

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, 2019 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 GENETICS INC. (Exact name of registrant as specified in its charter) Delaware 26-4753208 (State or ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Atossa Genetics is a clinical-stage biopharmaceutical company developing Endoxifen and intraductal microcatheter technology for breast cancer and related conditions, operating in R&D with no sustainable revenue [Company Overview](index=6&type=section&id=Item%201.%20Business%20-%20Overview) Atossa is a clinical-stage biopharmaceutical company developing oral and topical Endoxifen and intraductal microcatheter technology, with Phase 1 completed and Phase 2 studies underway - The company's lead program is the development of oral and topical Endoxifen to treat mammographic breast density (MBD), breast cancer in the 'window of opportunity' before surgery, gynecomastia, and for patients refractory to tamoxifen[15](index=15&type=chunk) - Atossa is also developing patented intraductal microcatheter technology for targeted delivery of therapies, including fulvestrant and immunotherapies like CAR-T, directly to the site of breast cancer[15](index=15&type=chunk) - Completed a Phase 1 study of oral and topical Endoxifen in 2017, meeting all safety, tolerability, and pharmacokinetic objectives. A Phase 1 study in men was also successfully completed in September 2018[16](index=16&type=chunk) - Currently conducting two Phase 2 studies: one using topical Endoxifen for MBD reduction in Sweden (fully enrolled with 90 participants) and another using oral Endoxifen for breast cancer patients pre-surgery in Australia[17](index=17&type=chunk) [Our Programs Under Development](index=7&type=section&id=Item%201.%20Business%20-%20Our%20Programs%20Under%20Development) The company's pipeline focuses on Endoxifen, with Phase 2 trials for MBD and pre-surgery breast cancer, and intraductal delivery technology for targeted therapies - By providing Endoxifen directly, the company aims to overcome issues with tamoxifen, such as ineffectiveness in patients with certain liver enzymes (up to **50% of users**) and the long time (**50-200 days**) required to reach therapeutic levels[22](index=22&type=chunk) - A Phase 2 study of topical Endoxifen to reduce MBD was fully enrolled with **90 participants** in Sweden. Dosing is expected to complete in April 2019, with preliminary results in Q2 2019. However, approximately **72 participants** have exited the study early, primarily due to skin rashes[27](index=27&type=chunk) - A Phase 2 study of oral Endoxifen is being conducted in Australia for newly-diagnosed ER+ breast cancer patients in the **~21-day** 'window of opportunity' before surgery, with the primary endpoint being reduction in tumor activity (Ki-67)[31](index=31&type=chunk) - The company is developing a novel method for transpapillary (TRAP) delivery of CAR-T cells into breast ducts, which is currently in the R&D stage and has a foundational patent application filed[36](index=36&type=chunk)[38](index=38&type=chunk) - A Phase 2 study is ongoing at Montefiore Medical Center to deliver fulvestrant via microcatheters directly into breast ducts for patients with DCIS or Stage 1/2 breast cancer[40](index=40&type=chunk) [Markets](index=11&type=section&id=Item%201.%20Business%20-%20Markets) The company estimates potential U.S. market opportunities of up to **$800 million** annually for intraductal therapies and up to **$1 billion** annually for Endoxifen programs - The potential U.S. market for intraductal administration of fulvestrant or similar drugs in DCIS patients is estimated to be up to **$800 million** annually[44](index=44&type=chunk) - The potential U.S. market for the company's Endoxifen in treatment and prevention settings is estimated to be up to **$1 billion** annually[44](index=44&type=chunk) [Our Capital Resources](index=13&type=section&id=Item%201.%20Business%20-%20Our%20Capital%20Resources) Atossa lacks sustainable revenue and relies on external capital, holding **$10.4 million** cash as of Dec 2018, supplemented by **$11.3 million** from March 2019 warrant exercises Financing Activities (2017-2018) | Date | Type | Gross Proceeds ($) | Net Proceeds ($) | | :--- | :--- | :--- | :--- | | Apr 2017 | Public Offering | ~$4.4M | ~$3.9M | | Oct 2017 | Public Offering | ~$5.5M | ~$4.9M | | Dec 2017 | Public Offering | ~$1.4M | ~$1.2M | | May 2018 | Rights Offering | ~$13.6M | ~$12.3M | - As of December 31, 2018, the company held cash and cash equivalents of **$10,380,493**[50](index=50&type=chunk) - In March 2019, the company received approximately **$11.3 million** from the exercise of warrants issued in May 2018[50](index=50&type=chunk) [Intellectual Property](index=13&type=section&id=Item%201.%20Business%20-%20Intellectual%20Property) The company's IP strategy focuses on patents for Endoxifen, Fulvestrant, and immunotherapy programs, holding **13 issued patents** and **29 pending applications** as of February 2019 Pending Patent Applications by Program (as of Feb 28, 2019) | Program | Pending U.S. Applications | Pending International Applications | Approximate Expiry Date | | :--- | :--- | :--- | :--- | | Endoxifen Program | 3 | 16 | 2034 - 2037 | | Fulvestrant Program | 4 | 16 | 2034 - 2037 | | Immunotherapy/CAR-T Program | 1 | 2 | 2037 - 2038 | - As of February 28, 2019, the company owns **13 issued patents** and **29 pending patent applications** related to its core pharmaceutical programs[55](index=55&type=chunk) - The company is strategically allowing certain device patents (ForeCyte, FullCyte, Acueity) to lapse as they are no longer core to its business[55](index=55&type=chunk) [Government Regulation](index=15&type=section&id=Item%201.%20Business%20-%20Government%20Regulation) The company is subject to extensive FDA and EMA regulations for drug development, approval, and post-approval, alongside medical device, data privacy, and anti-fraud laws - Drug development in the U.S. requires progression through preclinical testing, an Investigational New Drug (IND) application, and three phases of clinical trials before submitting a New Drug Application (NDA) to the FDA[66](index=66&type=chunk)[67](index=67&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) - In the E.U., marketing authorizations can be obtained via centralized, decentralized, or mutual recognition procedures, with cancer products typically requiring the centralized procedure through the European Medicines Agency (EMA)[84](index=84&type=chunk) - Medical devices are classified by the FDA into Class I, II, or III based on risk. Lower-risk devices may use the 510(k) clearance pathway, while higher-risk devices generally require a more stringent Premarket Approval (PMA)[99](index=99&type=chunk)[100](index=100&type=chunk) - The company is subject to data privacy laws, including HIPAA in the U.S. and the General Data Protection Regulation (GDPR) in the E.U., which imposes strict rules on collecting and transferring personal health data[110](index=110&type=chunk)[98](index=98&type=chunk) [Employees](index=25&type=section&id=Item%201.%20Business%20-%20Employees) As of the filing date, Atossa employs **two executive officers**, **two full-time**, and **two part-time employees**, including CEO Steven C. Quay and CFO Kyle Guse - The company has a small team consisting of **two executive officers**, **two full-time employees**, and **two part-time employees**[118](index=118&type=chunk) - Dr. Steven C. Quay, founder, serves as CEO, President, and Chairman. He holds an M.D. and Ph.D. from the University of Michigan Medical School and is a former faculty member at Stanford University School of Medicine[119](index=119&type=chunk) - Kyle Guse serves as CFO, General Counsel, and Secretary. He has over **25 years** of experience with life sciences companies and is a licensed CPA (inactive) and a member of the California Bar[120](index=120&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, clinical, operational, intellectual property, and market risks, including a history of losses, reliance on third parties, and stock price volatility - **Financial Risks:** The company has a history of operating losses (**$11.4 million in 2018**), an accumulated deficit of **$76.8 million**, and may not continue as a going concern without raising additional capital[128](index=128&type=chunk)[130](index=130&type=chunk)[137](index=137&type=chunk) - **Clinical & Regulatory Risks:** Product development is highly uncertain. Clinical trials may be delayed or fail, and regulatory approval from the FDA and other agencies is not guaranteed. The Phase 2 MBD study has experienced a higher-than-expected attrition rate[147](index=147&type=chunk)[149](index=149&type=chunk)[154](index=154&type=chunk) - **Operational Risks:** The company depends on third-party contractors for manufacturing and clinical research, exposing it to risks of performance failure, non-compliance with cGMP/GCP, and supply chain interruptions[167](index=167&type=chunk)[172](index=172&type=chunk) - **Intellectual Property Risks:** The company's success depends on its ability to protect its patents and trade secrets. Patent law is complex and uncertain, and the company may face infringement claims or be unable to enforce its rights globally[178](index=178&type=chunk)[180](index=180&type=chunk)[194](index=194&type=chunk) - **Market & Securities Risks:** The company's stock price is highly volatile. There is a risk of being delisted from NASDAQ if continued listing standards, such as the **$1.00 minimum bid price**, are not met. Future financing may cause significant dilution to existing stockholders[221](index=221&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk) [Unresolved Staff Comments](index=47&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - Not applicable[243](index=243&type=chunk) [Properties](index=47&type=section&id=Item%202.%20Properties) As of December 31, 2018, the company leases approximately **202 square feet** of office space in Seattle, Washington. Management believes these facilities are adequate for the company's needs for the next **24 months** - The company leases **202 sq. ft.** of office space in Seattle, WA, which is considered adequate for the next **24 months**[244](index=244&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) A securities class action lawsuit filed in October 2013 against the company, certain directors, officers, and underwriters was settled in 2018. The settlement amount was **$3.5 million**, which was fully funded by the defendants' insurers. The case is now considered closed - The securities class action lawsuit (Cook v. Atossa Genetics, Inc.) filed in 2013 was settled for **$3.5 million**[245](index=245&type=chunk) - The settlement was completely funded by defendants' insurers, and the court approved it on July 20, 2018. The case is closed[245](index=245&type=chunk) [Mine Safety Disclosure](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - Not applicable[247](index=247&type=chunk) Part II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under '**ATOS**', with approximately **33 record stockholders** and **15,000 beneficial holders** as of March 2019, and no cash dividends have been paid - Common stock is traded on The NASDAQ Capital Market under the symbol '**ATOS**'[248](index=248&type=chunk) - As of March 25, 2019, there were approximately **33 record stockholders** and **15,000 beneficial holders**[249](index=249&type=chunk) - The company has never paid cash dividends and does not plan to in the future[250](index=250&type=chunk) [Selected Financial Data](index=48&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable to the company - Not applicable[250](index=250&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) As a clinical-stage biopharmaceutical firm with no sustainable revenue, the company reported a **$11.4 million** net loss in 2018 due to increased R&D and G&A expenses, relying on external funding [Results of Operations](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20-%20Results%20of%20Operations) In 2018, the company had no revenue, with total operating expenses increasing **49% to $11.4 million**, driven by an **81% rise in R&D expenses** and a **49% increase in G&A costs** Comparison of Operating Expenses (Years Ended Dec 31) | Expense Category | 2018 ($) | 2017 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Research & Development | $4,210,000 | $2,328,000 | +81% | | General & Administrative | $7,224,000 | $4,859,000 | +49% | | Impairment of Intangibles | $0 | $462,000 | -100% | | **Total Operating Expenses** | **$11,434,000** | **$7,649,000** | **+49%** | - The increase in R&D expenses is attributed to manufacturing and clinical trial costs for the Endoxifen program, as two Phase 2 studies began in 2018[266](index=266&type=chunk) - The increase in G&A expenses was mainly due to higher stock-based compensation (**+$1.05 million**), one-time bonuses (**$350k**), and increased legal and professional fees (**+$600k**)[267](index=267&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20-%20Liquidity%20and%20Capital%20Resources) The company has a history of net losses and negative operating cash flows, with **$10.4 million** cash as of Dec 2018, supplemented by **$11.3 million** from March 2019 warrant exercises, requiring future funding Cash and Liquidity Snapshot | Metric | As of Dec 31, 2018 ($) | | :--- | :--- | | Cash and Cash Equivalents | $10.4 million | | Working Capital | $8.6 million | | Net Loss (FY 2018) | $11.4 million | | Cash Used in Operations (FY 2018) | $9.0 million | - In March 2019, the company received **$11.3 million** in cash from the exercise of outstanding warrants, boosting its cash position to **$19.3 million** as of March 25, 2019[270](index=270&type=chunk) Cash Flow Summary (Years Ended Dec 31) | Cash Flow Category | 2018 ($) | 2017 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($8,962,000) | ($6,594,000) | | Net Cash Used in Investing Activities | ($111,000) | $0 | | Net Cash Provided by Financing Activities | $12,291,000 | $10,783,000 | | **Net increase in cash** | **$3,218,024** | **$4,189,507** | - Management believes existing resources, including the March 2019 proceeds, will fund operations for at least the next **12 to 18 months**, but additional capital will be required to continue development programs[274](index=274&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable to the company - Not applicable[283](index=283&type=chunk) [Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements required for this item are included from page 53 of the report - The required financial statements are set forth beginning on page 53 of the report[283](index=283&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=56&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[283](index=283&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of Dec 2018 due to a material weakness in deemed dividend calculation, leading to a Q2 2018 restatement, with remediation focused on enhanced technical accounting review - Management concluded that disclosure controls and procedures were not effective as of December 31, 2018[284](index=284&type=chunk) - A material weakness was identified related to the incorrect calculation of a deemed dividend on Series B convertible preferred stock, which resulted in a restatement of the Q2 2018 Form 10-Q[286](index=286&type=chunk)[289](index=289&type=chunk) - The error was a miscalculation of the deemed dividend as **$4,782,100** instead of the correct **$11,479,308** for the three and six months ended June 30, 2018[286](index=286&type=chunk) - The remediation plan is to enhance procedures for reviewing technical accounting memorandums, potentially with an outside independent accounting firm[291](index=291&type=chunk) [Other Information](index=57&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[291](index=291&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 9, 2019 - Required information is incorporated by reference from the company's 2019 Proxy Statement[293](index=293&type=chunk) [Executive Compensation](index=58&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 9, 2019 - Required information is incorporated by reference from the company's 2019 Proxy Statement[294](index=294&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=58&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 9, 2019 - Required information is incorporated by reference from the company's 2019 Proxy Statement[295](index=295&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 9, 2019 - Required information is incorporated by reference from the company's 2019 Proxy Statement[296](index=296&type=chunk) [Principal Accounting Fees and Services](index=58&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 9, 2019 - Required information is incorporated by reference from the company's 2019 Proxy Statement[297](index=297&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=58&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the 10-K report. It includes the financial statements and an index of all exhibits. All financial statement schedules are omitted as they are not required or the information is included elsewhere - The financial statements are filed as part of the 10-K[298](index=298&type=chunk) - All financial statement schedules have been omitted because they are not required or the necessary information is already in the financial statements or notes[299](index=299&type=chunk) [Form 10-K Summary](index=58&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[300](index=300&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=61&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) BDO USA, LLP issued an unqualified opinion on the fair presentation of the consolidated financial statements for 2018 and 2017 in accordance with U.S. GAAP, noting no internal control audit was required - BDO USA, LLP expressed an unqualified opinion that the financial statements are fairly presented in accordance with U.S. GAAP[303](index=303&type=chunk) - The audit was conducted in accordance with PCAOB standards[305](index=305&type=chunk) - The company was not required to have, nor did the firm perform, an audit of its internal control over financial reporting[305](index=305&type=chunk) [Consolidated Financial Statements](index=62&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a net loss of **$11.4 million** for 2018, with total assets at **$11.7 million**, liabilities at **$2.9 million**, and stockholders' equity at **$8.8 million**, impacted by a **$11.5 million** deemed dividend Consolidated Balance Sheet Data (As of Dec 31) | Account | 2018 ($) | 2017 ($) | | :--- | :--- | :--- | | **Total Assets** | **$11,720,446** | **$8,164,094** | | Cash and cash equivalents | $10,380,493 | $7,217,469 | | **Total Liabilities** | **$2,915,436** | **$1,225,407** | | **Total Stockholders' Equity** | **$8,805,010** | **$6,938,687** | Consolidated Statement of Operations Data (Years Ended Dec 31) | Account | 2018 ($) | 2017 ($) | | :--- | :--- | :--- | | Research and development | $4,209,981 | $2,328,087 | | General and administrative | $7,224,252 | $4,859,369 | | **Operating loss** | **($11,434,233)** | **($7,649,171)** | | **Net loss** | **($11,404,934)** | **($8,122,581)** | | Deemed dividend | ($11,479,308) | ($2,568,132) | | **Net loss applicable to common shareholders** | **($22,884,242)** | **($10,690,713)** | | **Loss per common share - basic and diluted** | **($5.50)** | **($10.97)** | Consolidated Statement of Cash Flows Data (Years Ended Dec 31) | Category | 2018 ($) | 2017 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,961,621) | ($6,593,950) | | Net cash used in investing activities | ($110,906) | $0 | | Net cash provided by financing activities | $12,290,551 | $10,783,000 | | **Net increase in cash** | **$3,218,024** | **$4,189,507** | [Notes to Consolidated Financial Statements](index=67&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail financial condition, including going concern reliance on future funding, a **1-for-12 reverse stock split**, **$12.3 million** net from 2018 rights offering with an **$11.5 million** deemed dividend, and **$11.3 million** from March 2019 warrant exercises - **Going Concern:** Management states that while current funds are sufficient for at least one year, the company will require additional funding to continue operations beyond that date. The financial statements do not include adjustments related to this uncertainty. (Note 2)[320](index=320&type=chunk) - **Reverse Stock Split:** A **1-for-12 reverse stock split** was effectuated on April 20, 2018. All share and per-share data have been retroactively restated. (Note 3)[323](index=323&type=chunk) - **2018 Financing:** The May 2018 rights offering sold **13,624 units**, raising net proceeds of approximately **$12.3 million**. The accounting for the Series B convertible preferred stock and warrants resulted in a deemed dividend of **$11,479,308**. (Note 9)[371](index=371&type=chunk)[384](index=384&type=chunk) - **Executive Options:** In June 2018, options for **3 million shares** were granted to executives, classified as liabilities due to a cash settlement provision. These were cancelled and replaced in January 2019 with new options that do not contain the provision and are subject to shareholder approval. (Note 14 & 16)[410](index=410&type=chunk)[411](index=411&type=chunk)[421](index=421&type=chunk) - **Subsequent Events:** In March 2019, the company received approximately **$11.3 million** from the exercise of warrants issued in May 2018, resulting in the issuance of **2.8 million shares** of common stock. (Note 16)[423](index=423&type=chunk)