Atossa Therapeutics (ATOS) 10-Q 14 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 11, 2018
Document And Entity Information
Entity Registrant Name	ATOSSA GENETICS INC
Entity Central Index Key	1,488,039
Document Type	10-Q
Trading Symbol	ATOS
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,651,952
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 4,779,519	$ 7,217,469
Restricted cash	55,000	55,000
Prepaid expenses	495,667	250,944
Research and development tax rebate receivable	395,872	358,277
Other current assets	9,316	16,344
Total current assets	5,735,374	7,898,034
Furniture and equipment, net	59,810	11,467
Intangible assets, net	70,547	75,686
Other assets	114,571	178,907
Total assets	5,980,302	8,164,094
Current liabilities
Accounts payable	168,347	334,901
Accrued expenses	172,613	90,105
Payroll liabilities	356,427	784,867
Other current liabilities	23,323	15,534
Total current liabilities	720,710	1,225,407
Commitments and contingencies (note 11)
Stockholders' equity
Preferred stock - $.001 par value; 10,000,000 shares authorized, no shares issued or outstanding
Common stock - $.18 par value; 75,000,000 shares authorized, 2,651,952 shares issued and outstanding	477,342	477,342
Additional paid-in capital	72,082,961	71,887,674
Accumulated deficit	(67,300,711)	(65,426,329)
Total stockholders' equity	5,259,592	6,938,687
Total liabilities and stockholders' equity	$ 5,980,302	$ 8,164,094

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.18	$ 0.18
Common stock, authorized	75,000,000	75,000,000
Common stock, issued	2,651,952	2,651,952
Common stock, outstanding	2,651,952	2,651,952

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating expenses:
Research and development	$ 470,976	$ 544,302
General and administrative	1,403,465	1,159,289
Total operating expenses	1,874,441	1,703,591
Operating loss	(1,874,441)	(1,703,591)
Other income, net	59	37
Loss before income taxes	(1,874,382)	(1,703,554)
Income taxes
Net loss	$ (1,874,382)	$ (1,703,554)
Loss per common share - basic and diluted (in dollars per share)	$ (0.71)	$ (5.40)
Weighted average shares outstanding, basic and diluted (in shares)	2,651,952	315,576

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,874,382)	$ (1,703,554)	$ (8,100,000)
Compensation cost for stock options granted	215,139	154,707
Loss on disposal of asset		17,695
Depreciation and amortization	7,864	40,087
Changes in operating assets and liabilities:
Prepaid expenses	(244,723)	(123,230)
Research and development tax rebate receivable	(37,595)
Other assets	51,512	25,834
Accounts payable	(166,554)	132,557
Payroll liabilities	(428,440)	(439,010)
Accrued expenses	82,508	17,646
Other current liabilities	7,789	16,317
Net cash used in operating activities	(2,386,882)	(1,860,951)	(6,600,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and equipment	(51,068)
Net cash used in investing activities	(51,068)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(2,437,950)	(1,860,951)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE	7,272,469	3,082,962	3,082,962
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	4,834,519	1,222,011	$ 7,272,469
NONCASH INVESTING AND FINANCING ACTIVITIES
Amortization of commitment shares	$ 19,852	$ 19,852

NATURE OF OPERATIONS

NATURE OF OPERATIONS	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	NOTE 1: NATURE OF OPERATIONS Atossa Genetics Inc. (the “Company”) was incorporated on April 30, 2009 in the State of Delaware. The Company was formed to develop and market medical devices, laboratory tests and therapeutics to address breast health conditions. The Company’s fiscal year ends on December 31. The Company is focused on development of its pharmaceutical and drug delivery programs.

GOING CONCERN

GOING CONCERN	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	NOTE 2: GOING CONCERN The Company’s consolidated financial statements are prepared using Generally Accepted Accounting Principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative operating cash flows since inception. For the three months March 31, 2018 and the year ended December 31, 2017, the Company recorded a net loss of approximately $1.9 million and $8.1 million, respectively and used approximately $2.4 million and $6.6 million of cash in operating activities, respectively. As of March 31, 2018 and December 31, 2017 the Company had approximately $4.8 million and $7.2 million, respectively in cash and cash equivalents and working capital of approximately $5.0 million and $6.7 million, respectively. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such capital will be obtained on acceptable terms. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail its activities. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. Management’s plan to continue as a going concern includes obtaining additional capital resources. Management’s plans to obtain such resources for the Company include obtaining capital from the sale of its equity securities, potential exercise of outstanding warrants, and short-term borrowings from banks, stockholders or other related parties, if needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. As of the date of filing this report, without giving effect to the rights offering described in “Liquidity and Capital Resources” included in Part I Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations ” The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraphs and eventually to secure other sources of financing and attain profitable operations.

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
SUMMARY OF ACCOUNTING POLICIES	NOTE 3: SUMMARY OF ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2017. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. Subsequent to the balance sheet date, on April 20, 2018, the Company completed a 1-for-12 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 12 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, and the par value per share was changed to $0.18 per share. No fractional shares were issued because of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were rounded up. As a result of the Reverse Stock Split, fractional shares totaling approximately 57 were rounded up and issued to stockholders. The number of authorized shares of common stock was not reduced as a result of the Reverse Stock Split. The Company’s common stock began trading on a reverse stock split-adjusted basis on April 20, 2018. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements: In February 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Lease Accounting Topic 842. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features and Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

PREPAID EXPENSES

PREPAID EXPENSES	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid Expenses	NOTE 4: PREPAID EXPENSES Prepaid expenses consisted of the following: March 31, December 31, Prepaid insurance $ 136,670 $ 125,056 Retainer and security deposits 16,718 14,218 Professional services 168,181 97,788 Prepaid research and development 125,797 Financial exchange fees 41,250 Other 7,051 13,882 Total prepaid expenses $ 495,667 $ 250,944

RESEARCH AND DEVELOPMENT TAX RE

RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE	3 Months Ended
	Mar. 31, 2018
Research And Development Tax Rebate Receivable
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE	NOTE 5: RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE On May 23, 2017 Atossa formed a wholly-owned subsidiary in Australia called Atossa Genetics AUS Pty Ltd. The purpose of this subsidiary is to perform research and development activities (“R&D”) including our Phase 1 and Phase 2 endoxifen clinical trials. Australia offers an R&D cash rebate of $0.435 per dollar spent on qualified R&D activities incurred in the country. For the three months ended March 31, 2018, the Company incurred qualified R&D expenses of approximately $86,000 resulting in an increase to the R&D rebate receivable of approximately $38,000 from the December 31, 2017 balance, and a corresponding offset to R&D expenses in the same amount. At March 31, 2018, we had a total R&D rebate receivable of approximately $396,000.

PAYROLL LIABILITIES

PAYROLL LIABILITIES	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
PAYROLL LIABILITIES	NOTE 6: PAYROLL LIABILITIES Payroll liabilities consisted of the following: March 31, December 31, Accrued bonus payable $ 143,556 $ 566,000 Accrued vacation 142,922 147,861 Accrued payroll liabilities 69,949 71,006 Total payroll liabilities $ 356,427 $ 784,867

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 7: STOCKHOLDERS’ EQUITY As of the date of this filing, the Company is authorized to issue a total of 185,000,000 shares of stock consisting of 175,000,000 shares of common stock, par value $0.18 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share (Note13). The Company has designated 750,000 shares of Series A Junior Participating Preferred Stock, par value $0.001 per share, and 4,000 shares of Series A convertible preferred stock, par value $0.001 per share through the filings of certificates of designation with the Delaware Secretary of State, none of which are issued and outstanding as of March 31, 2018. On May 19, 2014, the Company adopted a stockholder rights agreement which provides that all stockholders of record on May 26, 2014 received a non-taxable distribution of one preferred stock purchase right for each share of the Company’s common stock held by such stockholder. Each right is attached to and trades with the associated share of common stock. The rights will become exercisable only if one of the following occurs: (1) a person becomes an “Acquiring Person” by acquiring beneficial ownership of 15% or more of the Company’s common stock (or, in the case of a person who beneficially owned 15% or more of the Company’s common stock on the date the stockholder rights agreement was executed, by acquiring beneficial ownership of additional shares representing 2.0% of the Company’s common stock then outstanding (excluding compensatory arrangements)), or (2) a person commences a tender offer that, if consummated, would result in such person becoming an Acquiring Person. If a person becomes an Acquiring Person, each right will entitle the holder, other than the Acquiring Person and certain related parties, to purchase a number of shares of the Company’s common stock with a market value that equals twice the exercise price of the right. The initial exercise price of each right is $15.00, so each holder (other than the Acquiring Person and certain related parties) exercising a right would be entitled to receive $30.00 worth of the Company’s common stock. If the Company is acquired in a merger or similar business combination transaction at any time after a person has become an Acquiring Person, each holder of a right (other than the Acquiring Person and certain related parties) will be entitled to purchase a similar amount of stock of the acquiring entity. Outstanding Warrants As of March 31, 2018, warrants to purchase 914,777 shares of common stock were outstanding including: Outstanding Exercise Price Expiration Date 2011 private placement 23,623 $ 225 - 288.00 May 8, 2018 2014 public offering 6,483 540.00 January 29, 2019 Placement agent fees for Company’s offerings 1,331 381.60 – 1,044.00 May - November, 2018 2017 Warrant A private placement 441,670 3.78 August 22, 2018 2017 Warrant B private placement 441,670 3.78 December 22, 2018 914,777

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NOTE 8: NET LOSS PER SHARE The Company accounts for and discloses net income (loss) per common share in accordance with ASC Topic 260, Earnings Per Share The following table summarizes the Company’s calculation of net loss per common share: Three Months Ended 2018 2017 Net loss per share Numerator Net loss attributable to common shareholders $ (1,874,382 ) $ (1,703,554 ) Denominator Weighted average common shares outstanding 2,651,952 315,576 Basic and diluted net loss per share $ (0.71 ) $ (5.40 ) The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three months ended March 31, 2018 and 2017 because the effect of them would be anti-dilutive: Three Months Ended 2018 2017 Options to purchase common stock 173,677 30,140 Warrants to purchase common stock 914,820 33,519 Total 1,088,497 63,659 For the three months ended March 31, 2018 and 2017, the average price of our common stock was less than the exercise price of the vested stock options and exercisable warrants.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 9: INCOME TAXES Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. No income tax liabilities existed as of March 31, 2018 and December 31, 2017 due to the Company’s continuing operating losses.

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK	3 Months Ended
	Mar. 31, 2018
Risks and Uncertainties [Abstract]
CONCENTRATION OF CREDIT RISK	NOTE 10: CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At March 31, 2018 and December 31, 2017, the Company had $4,529,519 and $6,967,469 in excess of the FDIC insured limit, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11: COMMITMENTS AND CONTINGENCIES Lease Commitments The Company has a commitment under an operating lease to pay future minimum lease payments of $12,325, all of which is due in the year ending December 31, 2018. Litigation and Contingencies On October 10, 2013, a putative securities class action complaint, captioned Cook v. Atossa Genetics, Inc., et al., No. 2:13-cv-01836-RSM, was filed in the United States District Court for the Western District of Washington against us, certain of our directors and officers and the underwriters of our November 2012 initial public offering. The complaint alleged that all defendants violated Sections 11 and 12(a)(2), and that we and certain of our directors and officers violated Section 15, of the Securities Act by making material false and misleading statements and omissions in the offering’s registration statement, and that we and certain of our directors and officers violated Sections 10(b) and 20A of the Exchange Act and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions in the registration statement and in certain of our subsequent press releases and SEC filings with respect to our NAF specimen collection process, our ForeCYTE Breast Health Test and our MASCT device. The complaint sought, on behalf of persons who purchased our common stock between November 8, 2012 and October 4, 2013, inclusive, damages of an unspecific amount. On March 23, 2018, the parties filed a stipulation of settlement with the court to settle the matter for $3.5 million, completely funded by defendants’ insurers, subject to the Court’s approval. On April 13, 2018, the court entered an order preliminarily approving the settlement. A final approval hearing is set for July 20, 2018. We do not believe the ultimate resolution of this matter will have a material effect on our financial position, results of operations or cash flows. We are subject to other legal proceedings and claims that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK BASED COMPENSATION	NOTE 12: STOCK BASED COMPENSATION Stock Options and Incentive Plan On September 28, 2010, the Board of Directors approved the adoption of the 2010 Stock Option and Incentive Plan the (“2010 Plan”) to provide for the grant of equity-based awards to employees, officers, non-employee directors and other key persons providing services to the Company. Awards of incentive options may be granted under the 2010 Plan until September 2020. No other awards may be granted under the 2010 Plan after the date that is 10 years from the date of stockholder approval. An aggregate of 5,556 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan and on May 18, 2016, an additional 11,111 shares were reserved for issuance under the 2010 Plan. On May 9, 2017, the stockholders approved an additional 125,000 shares for issuance under the 2010 Plan. The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of 2012 2,502 2013 2,871 2014 4,128 2015 5,463 2016 18,368 2017 12,623 2018 106,076 Total additional shares 152,031 The Company granted 1,667 options to purchase shares of common stock during the three months ended March 31, 2018. No options were exercised during the three months ended March 31, 2018. There are 112,780 shares available for grant under the 2010 Plan as of March 31, 2018. Options issued and outstanding as of March 31, 2018 and their activities during the three months then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2018 172,474 $ 49.22 $ Granted 1,667 5.04 Forfeited Expired Outstanding as of March 31, 2018 174,141 48.10 8.805 $ 520 Exercisable as of March 31, 2018 66,453 112.18 8.304 $ 0 Vested and expected to vest 174,141 $ 48.10 8.805 $ 520 At March 31, 2018, there were 107,688 unvested options outstanding and the related unrecognized total compensation cost associated with these options was approximately $768,234. This expense is expected to be recognized over a weighted-average period of 2.0 years.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 13: SUBSEQUENT EVENTS On April 20, 2018 an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Amended Certificate”) became effective to effectuate a reverse split of Atossa’s common stock and to increase the authorized shares of common stock by 100 million to 175 million. The Amended Certificate provides that each 12 shares of outstanding common stock will be reconstituted into one share of common stock with a proportional increase in the par value of the common stock. Any resulting fractional shares were rounded up to the nearest whole share. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split. On April 12, 2018, the Company held its 2018 Annual Meeting of Stockholders (the “ Annual Meeting

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2017. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. Subsequent to the balance sheet date, on April 20, 2018, the Company completed a 1-for-12 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 12 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, and the par value per share was changed to $0.18 per share. No fractional shares were issued because of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were rounded up. As a result of the Reverse Stock Split, fractional shares totaling approximately 57 were rounded up and issued to stockholders. The number of authorized shares of common stock was not reduced as a result of the Reverse Stock Split. The Company’s common stock began trading on a reverse stock split-adjusted basis on April 20, 2018. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split.
Use of Estimates	Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements: In February 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Lease Accounting Topic 842. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features and Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

PREPAID EXPENSES (Tables)

PREPAID EXPENSES (Tables)	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of prepaid expenses	Prepaid expenses consisted of the following: March 31, December 31, Prepaid insurance $ 136,670 $ 125,056 Retainer and security deposits 16,718 14,218 Professional services 168,181 97,788 Prepaid research and development 125,797 Financial exchange fees 41,250 Other 7,051 13,882 Total prepaid expenses $ 495,667 $ 250,944

PAYROLL LIABILITIES (Tables)

PAYROLL LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Schedule of payroll liabilities	Payroll liabilities consisted of the following: March 31, December 31, Accrued bonus payable $ 143,556 $ 566,000 Accrued vacation 142,922 147,861 Accrued payroll liabilities 69,949 71,006 Total payroll liabilities $ 356,427 $ 784,867

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
Schedule of warrants	As of March 31, 2018, warrants to purchase 914,777 shares of common stock were outstanding including: Outstanding Exercise Price Expiration Date 2011 private placement 23,623 $ 225 - 288.00 May 8, 2018 2014 public offering 6,483 540.00 January 29, 2019 Placement agent fees for Company’s offerings 1,331 381.60 – 1,044.00 May - November, 2018 2017 Warrant A private placement 441,670 3.78 August 22, 2018 2017 Warrant B private placement 441,670 3.78 December 22, 2018 914,777

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Schedule of earning per share	The following table summarizes the Company’s calculation of net loss per common share: Three Months Ended 2018 2017 Net loss per share Numerator Net loss attributable to common shareholders $ (1,874,382 ) $ (1,703,554 ) Denominator Weighted average common shares outstanding 2,651,952 315,576 Basic and diluted net loss per share $ (0.71 ) $ (5.40 )
Schedule of antidilutive securities	The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three months ended March 31, 2018 and 2017 because the effect of them would be anti-dilutive: Three Months Ended 2018 2017 Options to purchase common stock 173,677 30,140 Warrants to purchase common stock 914,820 33,519 Total 1,088,497 63,659

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of automatic additions to the 2010 Plan	The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of 2012 2,502 2013 2,871 2014 4,128 2015 5,463 2016 18,368 2017 12,623 2018 106,076 Total additional shares 152,031
Schedule of stock options	Options issued and outstanding as of March 31, 2018 and their activities during the three months then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2018 172,474 $ 49.22 Granted 1,667 5.04 Forfeited Expired Outstanding as of March 31, 2018 174,141 48.10 8.805 $ 520 Exercisable as of March 31, 2018 66,453 112.18 8.304 $ 0 Vested and expected to vest 174,141 $ 48.10 8.805 $ 520

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (1,874,382)	$ (1,703,554)	$ (8,100,000)
Cash and cash equivalents	4,779,519		7,217,469
Working capital	5,000,000		6,700,000
Net cash provided by (used in) operating activities	$ (2,386,882)	$ (1,860,951)	$ (6,600,000)

SUMMARY OF ACCOUNTING POLICIE26

SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - USD ($)	Aug. 20, 2018	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Common stock, par or stated value (in dollars per share)			$ 0.18	$ 0.18
Common stock, outstanding			2,651,952	2,651,952
Restricted cash			$ 55,000	$ 55,000
Subsequent Event [Member]
Restricted cash		$ 55,000
Reverse Stock Split [Member] | Subsequent Event [Member]
Description of reverse stock split	The Company completed a 1-for-12 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 12 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, and the par value per share was changed to $0.18 per share.

PREPAID EXPENSES (Details)

PREPAID EXPENSES (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid insurance	$ 136,670	$ 125,056
Retainer and security deposits	16,718	14,218
Professional services	168,181	97,788
Prepaid research and development	125,797
Financial exchange fees	41,250
Other	7,051	13,882
Total prepaid expenses	$ 495,667	$ 250,944

RESEARCH AND DEVELOPMENT TAX 28

RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Research and development expense	$ 470,976	$ 544,302
Research and development tax rebate receivable	$ 37,595
Atossa Genetics AUS Pty Ltd [Member]
Description of research and development cash rebate offer	Australia offers an R&D cash rebate of $0.435 per dollar spent on qualified R&D activities incurred in the country.
Research and development expense	$ 86,000
Research and development tax rebate receivable	$ 396,000		$ 38,000

FURNITURE AND EQUIPMENT (Detail

FURNITURE AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2,725	$ 9,662

PAYROLL LIABILITIES (Details)

PAYROLL LIABILITIES (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued bonus payable	$ 143,556	$ 566,000
Accrued vacation	142,922	147,861
Accrued payroll liabilities	69,949	71,006
Total payroll liabilities	$ 356,427	$ 784,867

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding | shares	914,777
Class of Warrant or Right, Exercise Price of Warrants or Rights
2011 Private Placement [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding | shares	23,623
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable	May 8, 2018
2011 Private Placement [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 225
2011 Private Placement [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 288
2014 Public Offering [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding | shares	6,483
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 540
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable	Jan. 29, 2019
Placement Agent Fee [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding | shares	1,331
Placement Agent Fee [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 381.60
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable	May 31, 2018
Placement Agent Fee [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1,044
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable	Nov. 30, 2018
2017 Warrant A Private Placement [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding | shares	441,670
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.78
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable	Aug. 22, 2018
2017 Warrant B Private Placement [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding | shares	441,670
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.78
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable	Dec. 22, 2018

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares	Mar. 31, 2018	Dec. 31, 2017	May 19, 2014
Number of total shares authorized (in shares)	185,000,000
Common stock, authorized (in shares)	75,000,000	75,000,000
Common stock, par or stated value (in dollars per share)	$ 0.18	$ 0.18
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, par or stated value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Initial exercise price (in dollars per share)
Series A Preferred Stock [Member]
Preferred stock, authorized (in shares)	750,000
Preferred stock, par or stated value (in dollars per share)	$ 0.001
Preferred stock, issued (in shares)	0
Preferred stock, outstanding (in shares)	0
Series A Convertible Preferred Stock Convertible [Member]
Preferred stock, authorized (in shares)	4,000
Preferred stock, par or stated value (in dollars per share)	$ 0.001
Preferred stock, issued (in shares)	0
Preferred stock, outstanding (in shares)	0
Beneficial Owner [Member]
Ownership percentage (in percent)			15.00%
Percentage of common stock outstanding (in percent)			2.00%
Entitled to receive worth of common stock (in dollars per share)			$ 30
Initial exercise price (in dollars per share)			$ 15

NET LOSS PER SHARE (Details)

NET LOSS PER SHARE (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Numerator
Net loss attributable to common shareholders	$ (1,874,382)	$ (1,703,554)	$ (8,100,000)
Denominator
Weighted average common shares outstanding	2,651,952	315,576
Basic and diluted net loss per share	$ (0.71)	$ (5.40)

NET LOSS PER SHARE (Details 1)

NET LOSS PER SHARE (Details 1) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of potential common shares excluded	1,088,497	63,659
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of potential common shares excluded	173,677	30,140
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of potential common shares excluded	914,820	33,519

CONCENTRATION OF CREDIT RISK (D

CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Risks and Uncertainties [Abstract]
Cash, FDIC insured amount	$ 250,000
Cash, uninsured amount	$ 4,529,519	$ 6,967,469

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Mar. 23, 2018	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Operating lease to pay in 2018 future minimum lease payments		$ 12,325
Amount paid claim settlement	$ 3,500,000

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details)	3 Months Ended
	Mar. 31, 2018shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	152,031
2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	2,502
2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	2,871
2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	4,128
2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	5,463
2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	18,368
2017 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	12,623
2018 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total additional shares	106,076

STOCK BASED COMPENSATION (Det38

STOCK BASED COMPENSATION (Details 1)	3 Months Ended
	Mar. 31, 2018USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning | shares	172,474
Granted | shares	1,667
Forfeited | shares
Expired | shares
Outstanding at ending | shares	174,141
Exercisable at ending | shares	66,453
Vested and expected to vest | shares	174,141
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Rollforward]
Outstanding at beginning | $ / shares	$ 49.22
Granted | $ / shares	5.04
Forfeited | $ / shares
Expired | $ / shares
Outstanding at ending | $ / shares	48.10
Exercisable at ending | $ / shares	112.18
Vested and expected to vest | $ / shares	$ 48.10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Contractual Life Remaining in Years [Rollforward]
Outstanding at ending	8 years 9 months 20 days
Exercisable at end	8 years 3 months 20 days
Vested and expected to vest	8 years 9 months 20 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Rollforward]
Outstanding at ending | $	$ 520
Exercisable at ending | $	0
Vested and expected to vest | $	$ 520

STOCK BASED COMPENSATION (Det39

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	May 09, 2017	May 18, 2016	Sep. 28, 2010
Number of shares granted	1,667
Number of unvested options outstanding	107,688
Unrecognized compensation cost	$ 768,234
Vesting period	2 years
Stock Option and Incentive Plan 2010 [Member]
Shares held in employee stock option plan suspense shares		125,000	11,111	5,556
Number of shares available for grant	112,780

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - shares	Apr. 20, 2018	Apr. 12, 2018	Mar. 31, 2018	Dec. 31, 2017
Common stock, authorized			75,000,000	75,000,000
Number of additional shares authorized for issuance under compensation plan			152,031
Subsequent Event [Member]
Common stock, authorized	100,000,000
Revised common stock Shares authorized	175,000,000
Description of reconstituted common stock outstanding	The Amended Certificate provides that each 12 shares of outstanding common stock will be reconstituted into one share of common stock with a proportional increase in the par value of the common stock.
Subsequent Event [Member] | Stock Option and Incentive Plan 2010 [Member]
Number of additional shares authorized for issuance under compensation plan		500,000