ASPIRA WOMEN'S HEALTH INC., 10-K filed on 31 Mar 21
v3.21.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2020
Mar. 29, 2021
Jun. 30, 2020
Document And Entity Information [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2020    
Document Transition Report false    
Current Fiscal Year End Date --12-31    
Entity File Number 001-34810    
Entity Registrant Name Aspira Women's Health Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 33-0595156    
Entity Address, Address Line One 12117 Bee Caves Road    
Entity Address, Address Line Two Building III    
Entity Address, Address Line Three Suite 100    
Entity Address, City or Town Austin    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 78738    
City Area Code 512    
Local Phone Number 519-0400    
Title of 12(b) Security Common Stock, par value $0.001 per share    
Trading Symbol AWH    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Entity Public Float     $ 290,267,539
Entity Common Stock, Shares Outstanding   111,716,852  
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
Entity Central Index Key 0000926617    
Amendment Flag false    
Documents Incorporated by Reference

Certain information from the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders is incorporated by reference into Part III of this report. The registrant intends to file the Proxy Statement with the Securities and Exchange Commission within 120 days of December 31, 2020.

   
v3.21.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 16,631 $ 11,703
Accounts receivable 865 924
Prepaid expenses and other current assets 1,077 758
Inventories 30 25
Total current assets 18,603 13,410
Property and equipment, net 583 353
Right-of-use assets 406 52
Other assets 13 13
Total assets 19,605 13,828
Current liabilities:    
Accounts payable 1,149 855
Accrued liabilities 3,618 2,588
Current portion long-term debt 999 193
Short-term debt 611 303
Lease liability 23 39
Total current liabilities 6,400 3,978
Non-current liabilities:    
Long-term debt 3,077 1,099
Lease liability 409 13
Total liabilities 9,886 5,090
Commitments and contingencies (Notes 3 and 6)
Stockholders' equity:    
Common stock, par value $0.001 per share, 150,000,000 shares authorized at December 31, 2020 and December 31, 2019; 104,619,876 and 97,286,157 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively 105 97
Additional paid-in capital 449,680 430,802
Accumulated deficit (440,066) (422,161)
Total stockholders' equity 9,719 8,738
Total liabilities and stockholders' equity $ 19,605 $ 13,828
v3.21.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2020
Dec. 31, 2019
Consolidated Balance Sheets [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 150,000,000 150,000,000
Common stock, shares issued 104,619,876 97,286,157
Common stock, shares outstanding 104,619,876 97,286,157
v3.21.1
Consolidated Statements Of Operations - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Revenue:    
Revenue $ 4,651 $ 4,538
Cost of revenue:    
Cost of revenue [1] 3,415 3,343
Gross profit 1,236 1,195
Operating expenses:    
Research and development [1] 2,104 1,018
Sales and marketing [1] 8,843 9,645
General and administrative [1] 8,270 5,810
Total operating expenses 19,217 16,473
Loss from operations (17,981) (15,278)
Interest income, net 10 59
Other income (expense), net 66 (18)
Net loss $ (17,905) $ (15,237)
Net loss per share - basic and diluted $ (0.18) $ (0.18)
Weighted average common shares used to compute basic and diluted net loss per common share 100,723,303 86,595,581
Product [Member]    
Revenue:    
Revenue $ 4,530 $ 4,404
Cost of revenue:    
Cost of revenue [1] 2,500 2,378
Genetics [Member]    
Revenue:    
Revenue 108 22
Cost of revenue:    
Cost of revenue [1] 898 295
Service [Member]    
Revenue:    
Revenue 13 112
Cost of revenue:    
Cost of revenue [1] $ 17 $ 670
[1] Non-cash stock-based compensation expense included in cost of revenue and operating expenses
v3.21.1
Consolidated Statements Of Operations (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Cost Of Revenue [Member]    
Stock-based compensation expense $ 106 $ 78
Research And Development [Member]    
Stock-based compensation expense 34 4
Sales And Marketing [Member]    
Stock-based compensation expense 228 125
General And Administrative [Member]    
Stock-based compensation expense $ 1,180 $ 986
v3.21.1
Consolidated Statements Of Changes In Stockholders' Equity - USD ($)
$ in Thousands
Public Offering Exercise Of Underwriter's Option [Member]
Common Stock [Member]
Public Offering Exercise Of Underwriter's Option [Member]
Additional Paid-In Capital [Member]
Public Offering Exercise Of Underwriter's Option [Member]
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Total
Balance (in shares) at Dec. 31, 2018       75,501,394      
Balance at Dec. 31, 2018       $ 75 $ 414,001 $ (406,924) $ 7,152
Net loss           (15,237) $ (15,237)
Common stock issued in conjunction with exercise of stock options (in shares)       19,687     19,687
Common stock issued in conjunction with exercise of stock options         17   $ 17
Common stock issued in conjunction with public offering, net of issuance costs (in shares) 2,812,500     18,750,000      
Common stock issued in conjunction with public offering, net of issuance costs $ 3 $ 2,089 $ 2,092 $ 19 13,502   13,521
Common stock issued for restricted stock awards (in shares)       202,576      
Common stock issued for restricted stock awards         250   250
Stock compensation charge         943   943
Balance (in shares) at Dec. 31, 2019       97,286,157      
Balance at Dec. 31, 2019       $ 97 430,802 (422,161) 8,738
Net loss           (17,905) $ (17,905)
Common stock issued in conjunction with exercise of stock options (in shares)       1,105,675     1,105,675
Common stock issued in conjunction with exercise of stock options       $ 1 1,636   $ 1,637
Common stock issued for restricted stock awards (in shares)       267,706      
Common stock issued for restricted stock awards         182   182
Stock compensation charge         1,366   1,366
Common stock issued in conjunction with warrant exercises (in shares)       2,810,338      
Common stock issued in conjunction with warrant exercises       $ 4 5,056   5,060
Common stock issued in conjunction with private placement, net of issuance costs, (in shares)       3,150,000      
Common stock issued in conjunction with private placement, net of issuance costs       $ 3 10,638   10,641
Balance (in shares) at Dec. 31, 2020       104,619,876      
Balance at Dec. 31, 2020       $ 105 $ 449,680 $ (440,066) $ 9,719
v3.21.1
Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Private Placement [Member]    
Stock issued, issuance costs $ 384  
Public Offering Of Common Stock [Member]    
Stock issued, issuance costs   $ 1,480
Public Offering Exercise Of Underwriter's Option [Member]    
Stock issued, issuance costs   $ 158
v3.21.1
Consolidated Statements Of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Cash flows from operating activities:    
Net loss $ (17,905) $ (15,237)
Adjustments to reconcile net loss to net cash used in operating activities:    
Non-cash lease expense 26  
Depreciation and amortization 265 333
Stock-based compensation expense 1,548 1,193
Loss on sale and disposal of property and equipment 3 55
Changes in operating assets and liabilities:    
Accounts receivable 59 (138)
Prepaid expenses and other assets (319) (209)
Inventories (5) 67
Accounts payable, accrued liabilities and other liabilities 1,594 971
Net cash used in operating activities (14,734) (12,965)
Cash flows from investing activities:    
Purchase of property and equipment (490) (133)
Net cash used in investing activities (490) (133)
Cash flows from financing activities:    
Proceeds from sale of common stock, net of issuance costs   13,521
Proceeds from issuance of common stock in conjunction with the exercise of the underwriter’s option to purchase additional shares in connection with a public offering, net of issuance costs   2,092
Principal repayment of DECD loan (191) (189)
Proceeds from issuance of common stock from exercise of stock options 1,637 17
Proceeds from DECD loan 2,000  
Proceeds from PPP loan 1,005  
Proceeds from exercise of warrants 5,060  
Proceeds from private placement, net of issuance costs 10,641  
Net cash provided by financing activities 20,152 15,441
Net increase in cash and cash equivalents 4,928 2,343
Cash and cash equivalents, beginning of period 11,703 9,360
Cash and cash equivalents, end of period 16,631 11,703
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest 37 38
Supplemental disclosure of noncash investing and financing activities:    
Net increase in right-of-use assets 354 $ 52
Net changes in accounts payable related to capital expenditures $ 8  
v3.21.1
Basis Of Presentation And Summary Of Significant Accounting And Reporting Policies
12 Months Ended
Dec. 31, 2020
Basis Of Presentation And Summary Of Significant Accounting And Reporting Policies [Abstract]  
Basis Of Presentation And Summary Of Significant Accounting And Reporting Policies

NOTE 1:Basis of Presentation and Summary of Significant Accounting and Reporting Policies



Organization and Basis of Presentation



Aspira Women’s Health Inc., formerly known as Vermillion, Inc. (“Aspira” and its wholly-owned subsidiaries are collectively referred to as the “Company) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company currently markets and sells the following products and related services: (1) OVA1, a blood test designed to, in addition to a physician’s clinical assessment of a woman with a pelvic mass, identify women who are at high-risk of having a malignant ovarian tumor prior to planned surgery; (2) OVERA, a second-generation biomarker panel intended to maintain our product’s high sensitivity while improving specificity; (3) OVA1plus, a service offering combining our OVA1 and OVERA products, designed to improve accuracy and reduce false elevations in the intermediate risk area by leveraging the strengths of OVA1’s (MIA) sensitivity and OVERA’s (MIA2G) specificity; (4) Aspira GenetiX, a genetic test for gynecologic cancer risk, with a core focus on female reproductive cancers, including breast, ovarian, endometrial, uterine and cervical cancers; and (5) Aspira Synergy, the Company’s new decentralized platform and cloud service technology. Through December 31, 2020, the Company’s product and related services revenue was limited to revenue generated by sales of OVA1, OVA1plus and Aspira GenetiXThe Company sells OVA1 and OVA1plus through Aspira’s wholly-owned Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified clinical laboratory, Aspira Labs, Inc. (“ASPiRA LABS”).



The Company has historically also offered in-vitro diagnostic (“IVD”) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (“ASPiRA IVD”), which commenced operations in June 2016. ASPiRA IVD was a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize high-complexity assays. The Company has discontinued pursuing contracts for ASPiRA IVD and its contractual commitments were largely concluded in the fourth quarter of 2019.



Effective January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”), and elected the package of practical expedients, including the hindsight practical expedient and the new transition approach permitted by ASU No. 2018-11, Leases, Targeted Improvements (“ASU 2018-11”).  The standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2018-11 allows the Company not to reassess existing identification of leases, classification of leases or any initial direct costs. The Company has two office leases, one of which has as lease less than 12 months. The Company recognized ROU assets and a lease liability of approximately $178,000 related to its leases on its consolidated balance sheet as of January 1, 2019. The Company did not have a cumulative adjustment impacting retained earnings.



Effective January 1, 2020, the Company adopted FASB ASU No. 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, using the prospective transition approach, which allows the Company to change the accounting method without restating prior periods or booking cumulative adjustments. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements.



Liquidity



The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately $440,066,000 and had limited liquidity at December 31, 2020. The Company also expects to incur a net loss and negative cash flows from operations for 2021. 



In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. The novel coronavirus has since spread to over 100 countries, including every state in the United States. In March 2020, the World Health Organization declared COVID-19, the disease caused by the novel coronavirus, a pandemic, and the United States declared a national emergency with respect to the coronavirus outbreak. This outbreak has severely impacted global economic activity, and many countries and many states in the United States have reacted to the outbreak by instituting quarantines, mandating business and school closures and restricting travel. In addition, many conventions and industry conferences have been canceled.



As a result of the COVID-19 pandemic and actions taken to contain it, the Company’s test volume, and resulting revenue, decreased significantly in late March and the full month of April 2020 as fewer patients visited their physicians and elective surgeries were postponed as a result of closures. The Company saw some increases in its test volume towards the latter half of the second quarter and in the third quarter of 2020, and test volume trended back to pre-COVID-19 levels during the late third quarter 2020. In order to reduce the impact of limitations on visiting physician offices due to closures and quarantines, the Company implemented other mechanisms for reaching physicians such as virtual sales representative meetings and increased digital sales and marketing. Enrollment for future studies has been slower than originally planned due to the impact of current closures for some states. The full impact of the COVID-19 pandemic continues to evolve as of the date of this filing. As a result, the Company is unable to estimate the extent of the impact of the COVID-19 pandemic on its liquidity.



As discussed in Note 6, in March 2016, the Company entered into a loan agreement (as amended on March 7, 2018 and April 3, 2020, the “Loan Agreement”) with the State of Connecticut Department of Economic and Community Development (the “DECD”), pursuant to which it may borrow up to $4,000,000 from the DECD.  



The loan may be prepaid at any time without premium or penalty. An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. On December 3, 2020, the Company received a disbursement of the remaining $2,000,000 under the Loan Agreement, as the Company had we achieved the target employment milestone necessary to receive an additional $1,000,000 under the Loan Agreement and the DECD determined to fund the remaining $1,000,000 under the Loan Agreement after concluding that the required revenue target would likely have been achieved in the first quarter of 2020 in the absence of the impacts of COVID-19.



As discussed in Note 7, on June 28, 2019, the Company completed a public offering (the “2019 Offering”), pursuant to which certain investors purchased Aspira common stock for net proceeds of approximately $13,521,000 after deducting underwriting discounts, commissions and other expenses related to the 2019 Offering. On July 2, 2019, William Blair & Company, L.L.C., the sole underwriter of the 2019 Offering, exercised its option to purchase additional shares of Aspira common stock for net proceeds of $2,092,000, after deducting underwriting discounts, commissions and other expenses related to the 2019 Offering.



On April 10, 2020, the Company received a stimulus check of approximately $89,000 from the U.S. Department of Health and Human Services pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).



As discussed in Note 6, on May 1, 2020, the Company obtained a loan (the “PPP Loan”) from BBVA USA in the aggregate amount of $1,005,767, pursuant to the Paycheck Protection Program (the “PPP”), which was established under the CARES Act, as administered by the U.S. Small Business Administration (the “SBA”).



As discussed in Note 7, during June 2020, all of the warrants from the 2017 private placement were exercised.  The Company received $5,058,608 in aggregate proceeds from the exercise of the warrants.



As discussed in Note 7, on July 20, 2020, the Company completed a private placement of Aspira common stock for net proceeds of $10.6 million, after deducting expenses related to the private placement.



As discussed in Note 12, on February 8, 2021, the Company completed a public offering (the “2021 Offering”), resulting in net proceeds of approximately $48.4 million, after giving effect to the underwriting discounts but before expenses. 



As discussed in Note 6, in March 2021, the Company applied for forgiveness of the PPP Loan, but there is no assurance that all or a portion of the PPP Loan will be forgiven.



Basis of Consolidation



The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.





Use of Estimates



The preparation of consolidated financial statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The primary estimates underlying the Company’s consolidated financial statements include assumptions regarding revenue recognition as well as variables used in calculating the fair value of the Company’s equity awards, income taxes and contingent liabilities. Actual results could differ from those estimates.



Reclassification



Certain prior year amounts have been reclassified to conform to the current year presentation with no material effect on the consolidated financial statements.



Cash and Cash Equivalents



Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less from the date of purchase, which are readily convertible into known amounts of cash and are so near to their maturity that they present an insignificant risk of changes in value because of interest rate changes. Highly liquid investments that are considered cash equivalents include money market funds, certificates of deposits, treasury bills and commercial paper. The carrying value of cash equivalents approximates fair value due to the short-term maturity of these securities.



Fair Value Measurement



Accounting Standards Codification (“ASC”) Topic 820, Fair Value and Measurements (“ASC 820”), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:



Level 1 - Quoted prices in active markets for identical assets or liabilities.



Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.



Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.



If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. 



Concentration of Credit Risk



Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents in recognized financial institutions in the United States. The funds are insured by the FDIC up to a maximum of $250,000, but are otherwise unprotected. The Company has not experienced any losses associated with deposits of cash and cash equivalents. The Company does not invest in derivative instruments or engage in hedging activities.



Accounts Receivable



Virtually all accounts receivable are derived from sales made to customers located in North America. The Company performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral. The Company maintains an allowance for doubtful accounts based upon the expected collectability of accounts receivable.  



Property and Equipment



Property and equipment are carried at cost less accumulated depreciation and amortization. Property and equipment are depreciated when placed into service using the straight-line method over the estimated useful lives, generally three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the remaining term of the lease. Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operations.



Property and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If property and equipment are considered to be impaired, an impairment loss is recognized.



Revenue Recognition



Product Revenue – OVA1, OVERA and OVA1plus: The Company recognizes product revenue in accordance with the provisions of ASC 606. Product revenue is recognized upon completion of the OVA1, OVERA or OVA1plus test and delivery of results to the physician based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any developments or changes that could impact reimbursement. These estimates require significant judgment by management as the collection cycle on some accounts can be as long as one year.   



The Company also reviews its patient account population and determines an appropriate distribution of patient accounts by payer (i.e., Medicare, patient pay, other third-party payer, etc.) into portfolios with similar collection experience. The Company has elected this practical expedient that, when evaluated for collectability, results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis. During the year ended December 31, 2020, there were no adjustments to estimates of variable consideration to derecognize revenue for services provided in a prior period. There were no impairment losses on accounts receivable recorded during the years ended December 31, 2020 and 2019.



Genetics Revenue – Aspira GenetiX: Under ASC 606, the Company’s genetics revenue is recognized upon completion of the Aspira GenetiX test and delivery of results to the physician based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any developments or changes that could impact reimbursement. These estimates require significant judgment by management as the Company has limited experience with such factors relating to Aspira GenetiX.  



Service Revenue: The Company’s service revenue was generated by performing IVD trial services for third-party customers. Measurement of progress on contracts with customers was generally based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation. The Company does not expect to have any significant service revenue going forward, as it largely wound down performing the ASPiRA IVD trial services in the fourth quarter of 2019.  During 2020, the Company’s service revenue was limited to the fulfillment of one legacy IVD contract.   The Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The remainder are not material to the consolidated financial statements.



Research and Development Costs



Research and development costs are expensed as incurred. Research and development costs consist primarily of payroll and related costs, materials and supplies used in the development of new products, and fees paid to third parties that conduct certain research and development activities on behalf of the Company. In addition, acquisitions of assets to be consumed in research and development, with no alternative future use, are expensed as incurred as research and development costs. Software development costs incurred in the research and development of new products are expensed as incurred until technological feasibility is established.



Patent Costs



Costs incurred in filing, prosecuting and maintaining patents (principally legal fees) are expensed as incurred and recorded within general and administrative expenses on the Consolidated Statements of Operations. Such costs aggregated approximately $322,000 and $203,000 for the years ended December 31, 2020 and 2019, respectively.



Stock-Based Compensation



The Company records the fair value of non-cash stock-based compensation costs for stock options related to the 2019 Stock Incentive Plan (“2019 Plan”). The Company estimates the fair value of stock options using a Black-Scholes option valuation model. This model requires the input of subjective assumptions including expected stock price volatility, expected life and estimated forfeitures of each award. The Company uses the straight-line method to amortize the fair value over the requisite service period of the award, which is generally equal to the vesting period. These assumptions consist of estimates of future market conditions, which are inherently uncertain, and therefore are subject to management's judgment.



The expected life of options is based on historical data of actual experience with the options granted and represents the period of time that the options granted are expected to be outstanding. This data includes employees’ expected exercise and post-vesting employment termination behaviors. The expected stock price volatility is estimated using Company historical volatility in deriving the expected volatility assumption. The Company made an assessment that Company historic volatility is most representative of future stock price trends. The expected dividend yield is based on the estimated annual dividends that are expected to be paid over the expected life of the options as a percentage of the market value of the Company’s common stock as of the grant date. The risk-free interest rate for the expected life of the options granted is based on the United States Treasury yield curve in effect as of the grant date. The Company records stock-based compensation net of estimated forfeitures.



Contingencies



The Company accounts for contingencies in accordance with ASC 450 Contingencies (“ASC 450”) which requires that an estimated loss from a loss contingency be accrued when (i) information available prior to issuance of the financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and (ii) when the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and contract dispute matters requires the use of management’s judgment. Management believes that the Company’s accruals for these matters are adequate. Nevertheless, the actual loss from a loss contingency might differ from management’s estimates.  



Income Taxes



The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and the tax bases of assets and liabilities using the current tax laws and rates. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts more likely than not expected to be realized.



ASC Topic 740, Accounting for Uncertainty in Income Taxes clarifies the accounting for uncertainty in income taxes recognized in the financial statements and provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, and disclosure.



The Company recognizes interest and penalties related to unrecognized tax benefits within the interest expense line and other expense line, respectively, in the Consolidated Statements of Operations. Accrued interest and penalties are included within the related liability lines in the Consolidated Balance Sheets.



Net Loss Per Share



Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of common stock adjusted for the dilutive effect of common stock equivalent shares outstanding during the period. Common stock equivalents consist of stock options, restricted stock units and stock warrants. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect on earnings per share.



Fair Value of Financial Instruments



Financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and debt. The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value; therefore, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The effect of using different market assumptions and/or estimation methodologies may be material to the estimated fair value amounts. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are at cost, which approximates fair value due to the short maturity of those instruments. The carrying value of debt approximates fair value due to its interest rate approximating market rates of interest available to the Company for similar instruments.



Segment Reporting



The Company’s chief operating decision maker evaluates the business on a consolidated basis and therefore, the Company operates one operating and reportable segment.



v3.21.1
Recent Accounting Pronouncements
12 Months Ended
Dec. 31, 2020
Recent Accounting Pronouncements [Abstract]  
Recent Accounting Pronouncements

NOTE 2:Recent Accounting Pronouncements             



In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update changes the impairment model from the currently used incurred loss methodology to an expected loss methodology, which will result in the more timely recognition of losses. The ASU is scheduled to be effective in 2023 for smaller reporting companies. The Company is currently assessing the impact of this ASU on its consolidated financial statements.



v3.21.1
Strategic Alliance With Quest Diagnostics Incorporated
12 Months Ended
Dec. 31, 2020
Strategic Alliance With Quest Diagnostics Incorporated [Abstract]  
Strategic Alliance With Quest Diagnostics Incorporated

NOTE 3:Strategic Alliance with Quest Diagnostics Incorporated



In March 2015, the Company reached an agreement with Quest Diagnostics, Incorporated (“Quest Diagnostics”). Pursuant to this agreement, all OVA1 U.S. testing services for Quest Diagnostics customers were transferred to Aspira’s wholly-owned subsidiary, ASPiRA LABS, as of August 2015. Pursuant to this agreement, as amended as of March 11, 2020, Quest Diagnostics has continued to provide blood draw and logistics support by transporting specimens to ASPiRA LABS for testing in exchange for a market value fee. The purpose of the 2020 amendment was to extend the term of the Testing and Services Agreement from March 11, 2019 to March 11, 2023 and for the Company to pay an annual fee of $75,000 for the services of a part-time Quest Diagnostics project manager.



v3.21.1
Property And Equipment
12 Months Ended
Dec. 31, 2020
Property And Equipment [Abstract]  
Property And Equipment

Note 4:       Property and Equipment



The components of property and equipment as of December 31, 2020 and 2019 were as follows:







 

 

 

 

 



 

 

 

 

 



December 31,

(in thousands)

 

2020

 

 

2019

Machinery and equipment

$

1,094 

 

$

841 

Demonstration equipment

 

17 

 

 

16 

Computer equipment and software

 

1,194 

 

 

1,094 

Furniture and fixtures

 

154 

 

 

144 

Leasehold improvements

 

701 

 

 

639 

Gross property and equipment

 

3,160 

 

 

2,734 

Accumulated depreciation and amortization

 

(2,577)

 

 

(2,381)

Property and equipment, net

$

583 

 

$

353 



Depreciation expense for property and equipment was $265,000 and $333,000 for the years ended December 31, 2020 and 2019, respectively. 

v3.21.1
Accrued Liabilities
12 Months Ended
Dec. 31, 2020
Accrued Liabilities [Abstract]  
Accrued Liabilities

NOTE 5:Accrued Liabilities



The components of accrued liabilities as of December 31, 2020 and 2019 were as follows:







 

 

 

 

 



 

 

 

 

 



December 31,

(in thousands)

2020

 

2019

Payroll and benefits related expenses

$

1,874 

 

$

1,229 

Collaboration and research agreements expenses

 

616 

 

 

350 

Professional services

 

803 

 

 

679 

Other accrued liabilities

 

325 

 

 

330 

Total accrued liabilities

$

3,618 

 

$

2,588 



v3.21.1
Commitments, Contingencies And Debt
12 Months Ended
Dec. 31, 2020
Commitments, Contingencies And Debt [Abstract]  
Commitments, Contingencies And Debt

NOTE 6:Commitments, Contingencies and debt



Long-term debt consisted of the following:



 

 

 

 

 



 

Year Ended



December 31,



2020

 

2019

(in thousands)

 

 

 

 

 

DECD loan

$

3,070 

 

$

1,292 

PPP loan

 

1,006 

 

 

 -

Total debt

 

4,076 

 

 

1,292 

Less:  Current portion

 

(999)

 

 

(193)

Total long-term debt

 

3,077 

 

 

1,099 



Coronavirus Aid, Relief, and Economic Security (CARES) Act and Paycheck Protection Program Loan



On May 1, 2020, the Company obtained the PPP Loan from BBVA USA in the aggregate amount of $1,005,767. The application for these funds required the Company to, in good faith, certify that the described economic uncertainty at the time made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to consider its current business activity and its ability to access other sources of liquidity sufficient to support ongoing operations in a manner that was not significantly detrimental to the business. Under the terms of the CARES Act and the PPP, all or a portion of the principal amount of the PPP Loan is subject to forgiveness so long as, over the 24-week period following the Company’s receipt of the proceeds of the PPP Loan, the Company uses those proceeds for payroll costs, rent, utility costs or the maintenance of employee and compensation levels. The PPP Loan, which was granted pursuant to a promissory note, matures on May 1, 2022. Any unforgiven portion of the PPP Loan bears interest at a rate of 1.000% per annum, payable monthly in equal installments commencing in May 2021. The Company applied for forgiveness of the PPP Loan in March 2021, but there is no assurance that all or a portion of the PPP Loan will be forgiven. The PPP Loan is subject to any new guidance and new requirements released by the Department of the Treasury.



Loan Agreement



On March 22, 2016, the Company entered into a loan agreement (as amended, the “Loan Agreement”) with the DECD, pursuant to which the Company may borrow up to $4,000,000 from the DECD. The loan bears interest at a fixed rate of 2.0% per annum and requires equal monthly payments of principal and interest until maturity, which occurs on April 15, 2026. As security for the loan, the Company has granted the DECD a blanket security interest in the Company’s personal and intellectual property. The DECD’s security interest in the Company’s intellectual property may be subordinated to a qualified institutional lender. 



The loan may be prepaid at any time without premium or penalty. An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. On December 3, 2020, the Company received a disbursement of the remaining $2,000,000 under the Loan Agreement, as the Company had achieved the target employment milestone necessary to receive an additional $1,000,000 under the Loan Agreement and the DECD determined to fund the remaining $1,000,000 under the Loan Agreement after concluding that the required revenue target would likely have been achieved in the first quarter of 2020 in the absence of the impacts of COVID-19.



Under the terms of the Loan Agreement, the Company may be eligible for forgiveness of up to $1,500,000 of the principal amount of the loan if the Company achieves certain job creation and retention milestones by December 31, 2022. Conversely, if the Company is either unable to retain 25 full-time employees with a specified average annual salary for a consecutive two-year period or does not maintain the Company’s Connecticut operations through March 22, 2026, the DECD may require early repayment of a portion or all of the loan plus a penalty of 5% of the total funded loan.



As of December 31, 2020, the annual amounts of future minimum principal payments due under certain of the Company’s contractual obligations are shown in the table below.  Debt issuance costs for the DECD loan were $18,000.  Debt related to the PPP Loan of $1,000,000 and that certain insurance promissory note of $611,000, as described below, are not included in the table below, as the PPP Loan is expected to be forgiven and the $611,000 insurance promissory note is cancelable. 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Payments Due by Period

(in thousands)

 

 

Total

 

 

2021

 

 

2022

 

 

2023

 

 

2024

 

 

2025

 

 

Thereafter

DECD Loan

 

 

3,088 

 

 

508 

 

 

564 

 

 

576 

 

 

588 

 

 

599 

 

 

253 

Total

 

$

3,088 

 

$

508 

 

$

564 

 

$

576 

 

$

588 

 

$

599 

 

$

253 



Insurance Notes



During 2020 and 2019, the Company entered into insurance promissory notes for the payment of insurance premiums at an interest rate of 3.88% and 4.49% respectively, with an aggregate principal amount outstanding of approximately $611,000 and $303,000 as of December 31, 2020 and 2019, respectively. The amount outstanding could be substantially offset by the cancellation of the related insurance coverage which is classified in prepaid insurance. These notes are payable in ten monthly installments with maturity dates of October 1, 2021 and October 1, 2020, respectively.



Operating Leases



The Company leases facilities to support its business of discovering, developing and commercializing diagnostic tests in the fields of gynecologic disease. The Company’s principal facility, including the CLIA laboratory used by ASPiRA LABS, is located in Austin, Texas, and the CLIA laboratory used for ASPiRA IVD services is located in Trumbull, Connecticut.  In October 2020, the Company renewed the Austin, Texas lease for one additional year.  The Company’s renewed lease expires on January 31, 2022, with no automatic renewal or renewal option.



In October 2015, the Company entered into a lease agreement for a facility in Trumbull, Connecticut. The lease required initial payments for the buildout of leasehold improvements to the office space, which were approximately $596,000. In September 2020, the Company exercised the renewal option for its Trumbull, Connecticut lease. The Company’s renewed lease expires on June 30, 2026, with a five year renewal option.  The Company is not reasonably certain that it will exercise the five year renewal option beginning on July 1, 2026.



The expense associated with these operating leases for the years ended December 31, 2020 and 2019 is shown in the table below (in thousands).









 

 

 

 

 

 



 

Year Ended December 31

Lease Cost

Classification

2020

 

2019

Operating rent expense

 

 

 

 

 

 



Cost of revenue

$

71 

 

$

38 



Research and development

 

50 

 

 

11 



Sales and marketing

 

29 

 

 

35 



General and administrative

 

66 

 

 

46 

Variable rent expense

 

 

 

 

 

 



Cost of revenue

$

 

$

49 



Research and development

 

 

 

14 



Sales and marketing

 

45 

 

 

41 



General and administrative

 

54 

 

 

57 



Based on our leases as of December 31, 2020, the table below sets forth the approximate future lease payments related to operating leases with initial terms of one year or more (in thousands).







 

 

 



2021 

$

63 



2022 

 

95 



2023 

 

106 



2024 

 

116 



2025 

 

123 



2026 

 

64 



Total Operating Lease Payments

 

567 



Less: Interest

 

(135)



Present Value of Lease Liabilities

$

432 



 

 

 

Weighted-average lease term and discount rate were as follows:

 

 



 

 

 



Weighted-average remaining lease term (in years)

 

5.5 



Weighted-average discount rate

 

9.38% 



Non-cancelable Collaboration Obligations and Other Commitments



The Company is a party to an amended research collaboration agreement with The Johns Hopkins University School of Medicine under which the Company licenses certain of its intellectual property directed at the discovery and validation of biomarkers in human subjects, including but not limited to clinical application of biomarkers in the understanding, diagnosis and management of human disease. Under the terms of the amended research collaboration agreement, Aspira is required to pay the greater of 4% royalties on net sales of diagnostic tests using the assigned patents or annual minimum royalties of $57,500. Royalty expense for the years ended December 31, 2020 and 2019 totaled $181,000 and $176,000, respectively.    



Contingent Liabilities



From time to time, the Company is involved in legal proceedings and regulatory proceedings arising from operations. The Company establishes reserves for specific liabilities in connection with legal actions that management deems to be probable and estimable. The Company is not currently a party to any proceeding, the adverse outcome of which would have a material adverse effect on the Company’s financial position or results of operations.

v3.21.1
Common Stock
12 Months Ended
Dec. 31, 2020
Common Stock [Abstract]  
Common Stock

NOTE 7:Common Stock



2019 Offering



On June 26, 2019, the Company entered into an underwriting agreement (the “2019 Underwriting Agreement”) with William Blair & Company, L.L.C., as the sole underwriter (the “2019 Underwriter”), in connection with the underwritten public offering of 18,750,000 shares of the Company’s common stock, par value $0.001 per share.  



Pursuant to the 2019 Underwriting Agreement, the Company agreed to issue and sell an aggregate of 18,750,000 shares of Aspira common stock offered by the 2019 Underwriter in a public offering at a price of $0.80 per share (the “2019 Offering”). The 2019 Offering closed on June 28, 2019 and resulted in net proceeds to the Company of approximately $13,521,000, after deducting expenses of approximately $1,500,000.  



Under the 2019 Underwriting Agreement, the Company granted the 2019 Underwriter an option to purchase up to an additional 2,812,500 shares of Aspira common stock at the public offering price, less underwriting discounts and commissions. On July 2, 2019, the 2019 Underwriter exercised its option to purchase 2,812,500 shares of Aspira common stock at a price of $0.80 per share and resulted in proceeds to the Company of approximately $2,092,000, after deducting underwriting discounts, commissions and other expenses related to the offering.



2020 Exercise of Warrants



On February 17, 2017, the Company issued certain warrants to purchase up to an aggregate of 2,810,338 shares of Aspira common stock at an exercise price of $1.80 per share in connection with a February 2017 private placement of Aspira common stock. The warrants were initially sold at a price of $0.125 per share of common stock underlying the warrants



On June 1, 2020, following the 20th consecutive trading day for which the closing price per share of Aspira common stock, as reported on the Nasdaq stock market, exceeded the exercise price, the Company sent notice to the investors holding such warrants accelerating the expiration date of the warrants, in accordance with the terms thereof.  Pursuant to the terms of the warrants, any portion of the warrants not exercised prior to such accelerated expiration date would become void and of no value.



As of June 9, 2020, all of the warrants were exercised.  The Company issued 2,810,338 shares of Aspira common stock and received $5,060,000 in aggregate proceeds from the exercise of the warrants.  As of the date of the issuance of these financial statements, there are no outstanding warrants for the purchase of Aspira common stock.



2020 Private Placement



On July 20, 2020, the Company completed a private placement pursuant to which certain investors purchased 3,150,000 shares of Aspira common stock at a price of $3.50 per share.  Net proceeds of the private placement were $10.6 million, after deducting expenses related to the private placement of $384,000.  The sale of common stock qualified for equity treatment under GAAP.





v3.21.1
Loss Per Share
12 Months Ended
Dec. 31, 2020
Loss Per Share [Abstract]  
Loss Per Share

NOTE 8:      Loss Per Share



The reconciliation of the numerators and denominators of basic and diluted loss per share for the years ended December 31, 2020 and 2019 was as follows:





 

 

 

 

 

 

 



 

 

 

 

 

 

 



Loss

 

Shares

 

Per Share

(In thousands, except shares and per share data)

(Numerator)

 

(Denominator)

 

Amount

Year ended December 31, 2019:

 

 

 

 

 

 

 

Net loss available to common shareholders - basic

$

(15,237)

 

86,595,581 

 

$

(0.18)

Dilutive effect of common stock shares issuable upon exercise of stock options, exercise of warrants, and unvested restricted stock awards

 

 -

 

 -

 

 

 

Net loss available to common shareholders - diluted

$

(15,237)

 

86,595,581 

 

$

(0.18)



 

 

 

 

 

 

 

Year ended December 31, 2020:

 

 

 

 

 

 

 

Net loss available to common shareholders - basic

$

(17,905)

 

100,723,303 

 

$

(0.18)

Dilutive effect of common stock shares issuable upon exercise of stock options, exercise of warrants, and unvested restricted stock awards

 

 -

 

 -

 

 

 

Net loss available to common shareholders - diluted

$

(17,905)

 

100,723,303 

 

$

(0.18)



Due to net losses for the years ended December 31, 2020 and 2019, diluted loss per share is calculated using the weighted average number of common shares outstanding and excludes the effects of potential shares of common stock that are antidilutive. 



The potential shares of common stock that have been excluded from the diluted loss per share calculation above for the years ended December 31, 2020 and 2019 were as follows:







 

 

 



 

 

 



Year Ended December 31,



2020

 

2019

Stock options

8,212,112 

 

6,612,878 

Stock warrants

 -

 

2,810,338 

Unvested restricted stock awards

 -

 

 -

Potential common shares

8,212,112 

 

9,423,216 



v3.21.1
Employee Benefit Plans
12 Months Ended
Dec. 31, 2020
Employee Benefit Plans [Abstract]  
Employee Benefit Plans

NOTE 9:Employee Benefit Plans



2010 Stock Incentive Plan



The Company’s employees, directors, and consultants were eligible to receive awards under the Vermillion, Inc. Second Amended and Restated 2010 Stock Incentive Plan, which was replaced by the 2019 Plan (as defined below) with respect to future equity grants. As of December 31, 2020, a total of 4,776,503 shares of Aspira common stock were reserved for issuance with respect to outstanding stock options. 



2019 Stock Incentive Plan



At the Company’s 2019 annual meeting of stockholders, the Company’s stockholders approved the Vermillion, Inc. 2019 Stock Incentive Plan (the “2019 Plan”). The purposes of the 2019 Plan are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2019 Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining non-employee directors, officers, other employees, consultants, independent contractors and agents; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.  The 2019 Plan allows the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to participants.



Subject to the terms and conditions of the 2019 Plan, the initial number of shares authorized for grants under the 2019 Plan is 10,492,283. To the extent an equity award granted under the 2019 Plan expires or otherwise terminates without having been exercised or paid in full, or is settled in cash, the shares of common stock subject to such award will become available for future grant under the 2019 Plan. As of December 31, 2020, there were 10,492,283 shares of Aspira common stock available for future grants under the 2019 Plan. As of December 31, 2020, there were 3,442,109 shares of Aspira common stock subject to outstanding stock options and there were no outstanding restricted stock units.  



The activity related to shares available for grant under the 2010 Plan and the 2019 Plan for the years ended December 31, 2020 and 2019 was as follows:







 

 

 

 

 



 

 

 

 

 



2010 Stock Option Plan

 

2019 Stock Option Plan

 

Total

Shares available at December 31, 2018

5,178,819 

 

 -

 

5,178,819 

Shares added

 -

 

8,000,000 

 

8,000,000 

Shares transferred

(2,492,283)

 

2,492,283 

 

 -

Options canceled

691,025 

 

 -

 

691,025 

Options granted

(2,504,585)

 

(207,000)

 

(2,711,585)

Restricted stock units granted

(202,576)

 

 -

 

(202,576)

Shares available at December 31, 2019

670,400 

 

10,285,283 

 

10,955,683 



 

 

 

 

 

Options canceled

718,500 

 

502,000 

 

1,220,500 

Options granted

 -

 

(3,925,409)

 

(3,925,409)

Restricted stock units granted

 -

 

(356,940)

 

(356,940)

Shares forfeited

(1,388,900)

 

 -

 

(1,388,900)

Shares available at December 31, 2020

 -

 

6,504,934 

 

6,504,934 



The stock option activity under the 2010 Plan and the 2019 Plan for the years ended December 31, 2020 and 2019 was as follows:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



Number of Shares

 

Weighted Average Exercise Price

 

Aggregate Intrinsic Value

 

Weighted Average Remaining Contractual  Term

Options outstanding at December 31, 2018

4,612,005 

 

$

1.67 

 

$

 -

 

7.17 

Granted

2,711,585 

 

 

1.02 

 

 

 

 

 

Exercised

(19,687)

 

 

1.32 

 

 

 

 

 

Canceled

(691,025)

 

 

1.79 

 

 

 

 

 

Options outstanding at December 31, 2019

6,612,878 

 

$

1.67 

 

$

303,995 

 

8.66 

Granted

3,925,409 

 

 

1.46 

 

 

 

 

 

Exercised

(1,105,675)

 

 

1.48 

 

 

 

 

 

Canceled

(1,220,500)

 

 

0.75 

 

 

 

 

 

Options outstanding at December 31, 2020

8,212,112 

 

$

1.49 

 

$

42,833,712 

 

7.51 



 

 

 

 

 

 

 

 

 

Shares exercisable:

 

 

 

 

 

 

 

 

 

December 31, 2020

3,743,698 

 

$

1.56 

 

$

19,272,201 

 

6.41 

Shares expected to vest:

 

 

 

 

 

 

 

 

 

December 31, 2020

4,468,414 

 

$

1.44 

 

$

23,561,533 

 

8.91 



The range of exercise prices for options outstanding and exercisable at December 31, 2020 is as follows:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Exercise Price

 

Options Outstanding

 

 

Weighted  Average Exercise Price

 

Weighted Average  Remaining Life in Years

 

Options Exercisable

 

 

Weighted Average Exercise Price

$

0.47

-

$

0.68

 

2,157,468 

 

$

0.64

 

8.59 

 

613,968 

 

$

0.61 



0.71

-

 

1.29

 

3,012,383 

 

 

1.11

 

7.93 

 

1,039,133 

 

 

1.18 



1.31

-

 

2.83

 

2,102,197 

 

 

1.87

 

5.64 

 

1,750,572 

 

 

1.80 



2.87

-

 

4.80

 

940,064 

 

 

3.88

 

7.84 

 

340,025 

 

 

3.23 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.47

-

$

4.80

 

8,212,112 

 

$

1.49

 

7.51 

 

3,743,698 

 

$

1.56 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 



 

 

 

 

 

(in thousands)

 

Total Intrinsic Value of Options Exercised

 

 

Total Fair Value of Vested Options

Year ended December 31, 2020

$

3,439 

 

$

3,254 

Year ended December 31, 2019

$

 

$

2,869 



Stock-based Compensation



Stock-based Compensation Expense



The Company records stock-based compensation net of estimated forfeitures. The assumptions used to calculate the fair value of options granted under the 2010 Plan and the 2019 Plan that were incorporated in the Black-Scholes pricing model for the years ended December 31, 2020 and 2019 were as follows:









 

 

 

 

 

 

 



 

 

 

 

 

 

 



Year Ended December 31,



2020

 

2019

Dividend yield

 

 -

%

 

 

 -

%

Volatility

 

84 

%

 

 

79 

%

Risk-free interest rate

 

0.71 

%

 

 

2.30 

%

Expected lives (years)

 

2.9 

 

 

 

4.0 

 

Weighted average grant date fair value

$

0.87 

 

 

$

0.55 

 



The allocation of employee and director stock-based compensation expense by functional area for the years ended December 31, 2020 and 2019 was as follows:







 

 

 

 

 



 

 

 

 

 



Year Ended December 31,

(in thousands)

 

2020

 

2019

Cost of sales

$

96 

 

$

67 

Research and development

 

33 

 

 

Sales and marketing

 

162 

 

 

122 

General and administrative

 

924 

 

 

942 

Total

$

1,215 

 

$

1,135 



As of December 31, 2020, total unrecognized compensation cost related to unvested stock option awards was approximately $2,970,000 and the related weighted average period over which it is expected to be recognized was 2.72 years. As of December 31, 2020, there was no unrecognized compensation costs related to restricted stock units.



401(k) Plan



The Company’s 401(k) Plan allows eligible employees to defer up to an annual limit of the lesser of 90.0% of eligible compensation or a maximum contribution amount subject to the Internal Revenue Service annual contribution limit. The Company is not required to make Company contributions under the 401(k) Plan. During the years ended December 31, 2020 and 2019, the Company did not  make Company contributions to the 401(k) Plan.

v3.21.1
Income Taxes
12 Months Ended
Dec. 31, 2020
Income Taxes [Abstract]  
Income Taxes

NOTE 10:Income Taxes



During the preparation of the 2020 financial statements, immaterial errors were identified in the Company’s previous deferred tax disclosures. The Company has determined that a revision was required to correct certain gross deferred tax assets to reflect the proper amount of federal net operating loss carryforwards, to properly include state income taxes, and to properly exclude uncertain tax credit carryforwards. Specifically,  portions of the net operating losses (“NOLs”) that are subject to Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”) limitations, but were not limited, were excluded from deferred tax assets which led to an understatement of the deferred tax asset by $5,535,246 (tax effected); deferred state income taxes were not recorded, which led to an understatement of deferred tax assets of $2,466,759 (tax effected); and tax credit carryovers were incorrectly reflected, which led to an overstatement of deferred tax assets of $10,643,355 (tax effected). The net impact was an overstatement of deferred tax assets of $2,641,350.   However, there was no net impact to the net deferred tax asset and tax expense as the change in deferred tax assets was offset completely by a corresponding adjustment to the Company’s valuation allowance. For comparative purposes, the Company’s 2019 tax disclosure has been revised to reflect the adjustment to the deferred tax assets and valuation allowance. The Company evaluated the errors and concluded the impact was not material. The effect of these revisions to the net deferred tax asset balance was zero, and the revision had no impact on the Company’s consolidated balance sheet, statement of operations or statement of cash flows.



There was no income tax expense or benefit for the years ended December 31, 2020 or 2019 because of net losses during those years. These net losses were generated from domestic operations.



Domestic and foreign components of loss from continuing operations before income taxes for the years ended December 31, 2020 and 2019 were $17,905,000 and $15,236,000, respectively.





Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable.  Accordingly, the Company has provided a full valuation allowance against its net deferred tax assets at December 31, 2020 and 2019. There was no income tax expense or benefit for the years ended December 31, 2020 or 2019.  



The components of net deferred tax assets (liabilities) at December 31, 2020 and 2019 were as follows:









 

 

 

 

 



 

 

 

 

 



Year Ended December 31,

(in thousands)

2020

 

2019

Deferred tax assets:

 

 

 

 

 

Net operating losses

$

32,740 

 

$

28,939 

Amortization - R&D intangibles

 

2,495 

 

 

2,810 

Other

 

 -

 

 

124 

Total deferred tax assets

 

35,235 

 

 

31,873 

Valuation allowance

 

(35,195)

 

 

(31,873)

Deferred tax assets

$

40 

 

$

 -



 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

Other

$

40 

 

$

 -

Deferred tax liabilities

$

40 

 

$

 -



 

 

 

 

 

Net deferred tax asset

$

 -

 

$

 -



The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2020 and 2019 was as follows:









 

 

 

 

 



 

 

 

 

 



Year Ended December 31,



2020

 

2019

Tax at federal statutory rate

21 

%

 

21 

%

State tax, net of federal benefit

 

 

 

Valuation allowance

(19)

 

 

(42)

 

Net operating loss and tax credit carryforwards

(2)

 

 

23 

 

Permanent items

(1)

 

 

(1)

 

Other

 -

 

 

(2)

 

Effective income tax rate

 -

%

 

 -

%



As a result of the Tax Cuts and Jobs Act of 2017, federal NOLs arising before January 1, 2018, and federal NOLs arising after January 1, 2018, are subject to different rules. The Company's pre- 2018 federal NOLs will expire in varying amounts from 2021 through 2037, if not utilized; and can offset 100% of future taxable income for regular tax purposes. Any federal NOLs arising after January 1, 2018, can generally be carried forward indefinitely and can offset up to 80% of future taxable income. State NOLs will expire in varying amounts from 2021 through 2037 if not utilized. The Company's ability to use its NOLs during this period will be dependent on the Company's ability to generate taxable income, and the NOLs could expire before the Company generates sufficient taxable income.  



The Company's ability to use its net operating loss and credit carryforwards may be restricted due to ownership change limitations occurring in the past or that could occur in the future, as required by Section 382, as well as similar state provisions. These ownership changes may also limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.  



The Company believes that Section 382 ownership changes occurred as a result of the Company's follow-on public offerings in 2011, 2013, and 2015. Any limitation may result in the expiration of a portion of the net operating loss and tax credit carryforwards before utilization and any net operating loss and tax credit carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the Company's valuation allowance. Due to the existence of a valuation allowance, it is not expected that such limitations, if any, will have an impact on the Company's results of operations or financial position.



Provisional amounts



Company management believes that it is more likely than not that the benefit from certain deferred tax assets will not be realized due to the history of our operating losses. In recognition of this risk, the Company has provided a valuation allowance on the deferred tax assets relating to these assets. The valuation allowance was approximately $35,200,000 and $31,900,000 at December 31, 2020 and 2019, respectively. The increase of approximately $3,300,000 between 2019 and 2020 is primarily due to adjustments to the domestic deferred tax assets related to net operating losses.  



The Company files income tax returns in the U.S. and in various state jurisdictions with varying statutes of limitations. The Company has not been audited by the Internal Revenue Service or any state income or franchise tax agency. As of December 31, 2020, the Company's federal returns for the years ended 2017 through the current period and most state returns for the years ended 2016 through the current period are still open to examination. In addition, all of the net operating losses and research and development credits generated in years earlier than 2017 and 2016, respectively, are still subject to Internal Revenue Service audit. The federal and California tax returns for the year ended December 31, 2019 reflect research and development carryforwards of $5,292,000 and $5,351,000, respectively. For the year ended December 31, 2020, the Company anticipates claiming additional research and development credits of $20,000 on its federal tax return and $45,000 on its California tax return. 



As of December 31, 2020, the Company's gross unrecognized tax benefits are approximately $10,517,000 which are attributable to research and development credits.  A reconciliation of the change in the Company's unrecognized tax benefits is as follows:    









 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

(in thousands)

 

 

Federal Tax

 

 

State Tax

 

 

Total

Balance at December 31, 2018

 

$

5,637

 

$

5,330

 

$

10,967

Return to provision true up

 

 

(210)

 

 

 -

 

 

(210)

Increase in tax position during 2019

 

 

 -

 

 

21

 

 

21

Decrease due to expirations during 2019

 

 

(134)

 

 

 -

 

 

(134)

Balance at December 31, 2019

 

$

5,293

 

$

5,351

 

$

10,644

Return to provision true up

 

 

 -

 

 

 -

 

 

 -

Increase in tax position during 2020

 

 

20

 

 

45

 

 

65

Decrease due to expirations during 2020

 

 

(192)

 

 

 -

 

 

(192)

Balance at December 31, 2020

 

$

5,121

 

$

5,396

 

$

10,517



The increase for the year ended December 31, 2020 relates to a position taken in the current year.  The increase for the year ended December 31, 2019 is related to tax positions taken during 2019 and prior years.  If the $10.5 million of unrecognized income tax benefit is recognized, approximately $10.5 million would impact the effective tax rate in the period in which each of the benefits is recognized.



The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties related to unrecognized tax benefits within the interest expense line and other expense line, respectively, in the consolidated statement of operations and comprehensive loss. The Company has not recorded any interest or penalties as a result of uncertain tax positions as of December 31, 2020 and 2019. Accrued interest and penalties would be included within the related liability in the consolidated balance sheet.

v3.21.1
Related Party Transactions
12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 11:Related Party Transactions



None. 

 

v3.21.1
Subsequent Events
12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

NOTE 12:SUBSEQUENT EVENTS



On February 4, 2021, the Company entered into an underwriting agreement (the “2021 Underwriting Agreement”) with William Blair & Company, L.L.C. and Truist Securities, Inc., as representatives of several underwriters (the “2021 Underwriters”), in connection with the underwritten public offering of 6,000,000 shares of the Company’s common stock, par value $0.001 per share (the “2021 Firm Shares”), at a price to the public of $7.50 per share. The 2021 Underwriters purchased the 2021 Firm Shares at the public offering price per share, less the underwriting discount of $0.4875 per share.



Under the 2021 Underwriting Agreement, the Company granted the 2021 Underwriters an option to purchase up to an additional 900,000 shares of Aspira common stock, par value $0.001 per share (the “2021 Option Shares”), at the public offering price, less the underwriting discount of $0.4875 per share.  On February 5, 2021, the 2021 Underwriters notified the Company that they were exercising this option in connection with the closing of the 2021 Offering. The 2021 Offering, including the 2021 Option Shares, closed on February 8, 2021 and resulted in net proceeds to the Company of approximately $48.4 million,  after giving effect to underwriting discounts but before expenses. 



v3.21.1
Basis Of Presentation And Summary Of Significant Accounting And Reporting Policies (Policy)
12 Months Ended
Dec. 31, 2020
Basis Of Presentation And Summary Of Significant Accounting And Reporting Policies [Abstract]  
Organization and Basis of Presentation

Organization and Basis of Presentation



Aspira Women’s Health Inc., formerly known as Vermillion, Inc. (“Aspira” and its wholly-owned subsidiaries are collectively referred to as the “Company) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company currently markets and sells the following products and related services: (1) OVA1, a blood test designed to, in addition to a physician’s clinical assessment of a woman with a pelvic mass, identify women who are at high-risk of having a malignant ovarian tumor prior to planned surgery; (2) OVERA, a second-generation biomarker panel intended to maintain our product’s high sensitivity while improving specificity; (3) OVA1plus, a service offering combining our OVA1 and OVERA products, designed to improve accuracy and reduce false elevations in the intermediate risk area by leveraging the strengths of OVA1’s (MIA) sensitivity and OVERA’s (MIA2G) specificity; (4) Aspira GenetiX, a genetic test for gynecologic cancer risk, with a core focus on female reproductive cancers, including breast, ovarian, endometrial, uterine and cervical cancers; and (5) Aspira Synergy, the Company’s new decentralized platform and cloud service technology. Through December 31, 2020, the Company’s product and related services revenue was limited to revenue generated by sales of OVA1, OVA1plus and Aspira GenetiXThe Company sells OVA1 and OVA1plus through Aspira’s wholly-owned Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified clinical laboratory, Aspira Labs, Inc. (“ASPiRA LABS”).



The Company has historically also offered in-vitro diagnostic (“IVD”) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (“ASPiRA IVD”), which commenced operations in June 2016. ASPiRA IVD was a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize high-complexity assays. The Company has discontinued pursuing contracts for ASPiRA IVD and its contractual commitments were largely concluded in the fourth quarter of 2019.



Effective January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”), and elected the package of practical expedients, including the hindsight practical expedient and the new transition approach permitted by ASU No. 2018-11, Leases, Targeted Improvements (“ASU 2018-11”).  The standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2018-11 allows the Company not to reassess existing identification of leases, classification of leases or any initial direct costs. The Company has two office leases, one of which has as lease less than 12 months. The Company recognized ROU assets and a lease liability of approximately $178,000 related to its leases on its consolidated balance sheet as of January 1, 2019. The Company did not have a cumulative adjustment impacting retained earnings.



Effective January 1, 2020, the Company adopted FASB ASU No. 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, using the prospective transition approach, which allows the Company to change the accounting method without restating prior periods or booking cumulative adjustments. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements.



Liquidity

Liquidity



The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately $440,066,000 and had limited liquidity at December 31, 2020. The Company also expects to incur a net loss and negative cash flows from operations for 2021. 



In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. The novel coronavirus has since spread to over 100 countries, including every state in the United States. In March 2020, the World Health Organization declared COVID-19, the disease caused by the novel coronavirus, a pandemic, and the United States declared a national emergency with respect to the coronavirus outbreak. This outbreak has severely impacted global economic activity, and many countries and many states in the United States have reacted to the outbreak by instituting quarantines, mandating business and school closures and restricting travel. In addition, many conventions and industry conferences have been canceled.



As a result of the COVID-19 pandemic and actions taken to contain it, the Company’s test volume, and resulting revenue, decreased significantly in late March and the full month of April 2020 as fewer patients visited their physicians and elective surgeries were postponed as a result of closures. The Company saw some increases in its test volume towards the latter half of the second quarter and in the third quarter of 2020, and test volume trended back to pre-COVID-19 levels during the late third quarter 2020. In order to reduce the impact of limitations on visiting physician offices due to closures and quarantines, the Company implemented other mechanisms for reaching physicians such as virtual sales representative meetings and increased digital sales and marketing. Enrollment for future studies has been slower than originally planned due to the impact of current closures for some states. The full impact of the COVID-19 pandemic continues to evolve as of the date of this filing. As a result, the Company is unable to estimate the extent of the impact of the COVID-19 pandemic on its liquidity.



As discussed in Note 6, in March 2016, the Company entered into a loan agreement (as amended on March 7, 2018 and April 3, 2020, the “Loan Agreement”) with the State of Connecticut Department of Economic and Community Development (the “DECD”), pursuant to which it may borrow up to $4,000,000 from the DECD.  



The loan may be prepaid at any time without premium or penalty. An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. On December 3, 2020, the Company received a disbursement of the remaining $2,000,000 under the Loan Agreement, as the Company had we achieved the target employment milestone necessary to receive an additional $1,000,000 under the Loan Agreement and the DECD determined to fund the remaining $1,000,000 under the Loan Agreement after concluding that the required revenue target would likely have been achieved in the first quarter of 2020 in the absence of the impacts of COVID-19.



As discussed in Note 7, on June 28, 2019, the Company completed a public offering (the “2019 Offering”), pursuant to which certain investors purchased Aspira common stock for net proceeds of approximately $13,521,000 after deducting underwriting discounts, commissions and other expenses related to the 2019 Offering. On July 2, 2019, William Blair & Company, L.L.C., the sole underwriter of the 2019 Offering, exercised its option to purchase additional shares of Aspira common stock for net proceeds of $2,092,000, after deducting underwriting discounts, commissions and other expenses related to the 2019 Offering.



On April 10, 2020, the Company received a stimulus check of approximately $89,000 from the U.S. Department of Health and Human Services pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).



As discussed in Note 6, on May 1, 2020, the Company obtained a loan (the “PPP Loan”) from BBVA USA in the aggregate amount of $1,005,767, pursuant to the Paycheck Protection Program (the “PPP”), which was established under the CARES Act, as administered by the U.S. Small Business Administration (the “SBA”).



As discussed in Note 7, during June 2020, all of the warrants from the 2017 private placement were exercised.  The Company received $5,058,608 in aggregate proceeds from the exercise of the warrants.



As discussed in Note 7, on July 20, 2020, the Company completed a private placement of Aspira common stock for net proceeds of $10.6 million, after deducting expenses related to the private placement.



As discussed in Note 12, on February 8, 2021, the Company completed a public offering (the “2021 Offering”), resulting in net proceeds of approximately $48.4 million, after giving effect to the underwriting discounts but before expenses.