Atossa Therapeutics sets up $100,000,000 at-the-market stock program with Jefferies

The agreement

Atossa Therapeutics, Inc. (Nasdaq: ATOS) entered into an Open Market Sale Agreement with Jefferies LLC dated November 19, 2024. Under it, the company may offer and sell up to $100,000,000 of common stock from time to time, with Jefferies acting as sales agent. The company reported the agreement in a Form 8-K filed the same day. The prospectus supplement describes the sales as an at-the-market offering, which may be made on The Nasdaq Capital Market or on any other existing trading market for the stock.

The company has no obligation to sell any shares under the agreement, and it may suspend offers or end the agreement at any time, according to the 8-K. The prospectus supplement adds that there is no minimum offering amount and no arrangement for funds to be held in escrow, trust or a similar arrangement. Jefferies will confirm each day's sales to the company before the market opens the following day.

Fees and expenses

Jefferies is entitled to a commission of up to 3.0% of the aggregate gross sales price of each share sold. The company has agreed to reimburse Jefferies for the fees and disbursements of its counsel, payable when the agreement was signed, in an amount not to exceed $75,000, plus certain ongoing legal disbursements. The prospectus estimates the company's offering expenses, excluding Jefferies' commission and reimbursement, at about $400,000.

The shelf and the dilution

The shares are registered under a shelf registration statement on Form S-3, registration number 333-279367, with a prospectus dated May 23, 2024. The prospectus gives a worked example. At $1.28 a share, the last reported sale price on November 15, 2024, selling the full $100,000,000 would mean 78,125,000 shares. The prospectus then puts the total outstanding after the offering at up to 203,926,254 shares, compared with 125,801,254 shares outstanding on September 30, 2024. It says the actual number of shares will vary with the prices at which sales are made.

What the money is for

The company says it intends to use any net proceeds for clinical development of its product candidates, working capital and general corporate purposes. It may also use some of the money to license, acquire or invest in complementary businesses, technology, products or assets, but it says it has no current commitments to do so.

The prospectus also says the company does not expect the net proceeds from this offering, together with its existing cash and cash equivalents, to be sufficient to fund completion of development of any of its product candidates. It says it cannot yet specify with certainty all of the particular uses of the proceeds.

The business

Atossa describes itself as a clinical-stage biopharmaceutical company developing medicines for areas of significant unmet medical need in oncology, with a focus on women's breast cancer and other breast conditions. Its lead drug candidate is oral (Z)-endoxifen, which it is developing for both the prevention and treatment of breast cancer and other therapeutic areas. The company says it has patent protection for (Z)-endoxifen through at least November 17, 2038.

The risk factors list, among other things, whether the company will complete its clinical trial of oral (Z)-endoxifen in women with mammographic breast density, and its trials in women with breast cancer, and whether those studies meet their objectives. The company's strategy is to advance programs through clinical studies, potentially with partners, and to add programs through acquisition, minority investment, collaboration or internal development.

Atossa began operations in April 2009 as a Delaware corporation named Atossa Genetics Inc. It changed its name to Atossa Therapeutics, Inc. in January 2020, and its principal office is in Seattle, Washington.

What the filings leave open

The 8-K and the prospectus supplement give no cash balance, so these filings cannot show the program's size against the company's spending.

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