ASPIRA WOMEN'S HEALTH INC., 10-Q filed on 10 Nov 21
v3.21.2
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2021
Nov. 08, 2021
Document And Entity Information [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2021  
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 Three  
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 $0.001 per share  
Trading Symbol AWH  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   112,126,549
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0000926617  
Amendment Flag false  
v3.21.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 44,870 $ 16,631
Restricted cash 250  
Accounts receivable 1,103 865
Prepaid expenses and other current assets 828 1,077
Inventories 137 30
Total current assets 47,188 18,603
Property and equipment, net 498 583
Right-of-use assets 361 406
Other assets   13
Total assets 48,047 19,605
Current liabilities:    
Accounts payable 1,155 1,103
Accrued liabilities 4,998 3,618
Current portion of long-term debt 200 645
Short-term debt   611
Lease liability 56 23
Total current liabilities 6,409 6,000
Non-current liabilities:    
Long-term debt 2,768 3,477
Lease liability 366 409
Total liabilities 9,543 9,886
Commitments and contingencies (Note 3)
Stockholders' equity:    
Common stock, par value $0.001 per share, 150,000,000 shares authorized at September 30, 2021 and December 31, 2020; 112,100,049 and 104,619,876 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 112 105
Additional paid-in capital 501,159 449,680
Accumulated deficit (462,767) (440,066)
Total stockholders' equity 38,504 9,719
Total liabilities and stockholders' equity $ 48,047 $ 19,605
v3.21.2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2021
Dec. 31, 2020
Condensed 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 112,100,049 104,619,876
Common stock, shares outstanding 112,100,049 104,619,876
v3.21.2
Condensed Consolidated Statements Of Operations - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Revenue:        
Revenue $ 1,666 $ 1,239 $ 4,961 $ 3,205
Cost of revenue:        
Cost of revenue [1] 917 807 2,913 2,200
Gross profit 749 432 2,048 1,005
Operating expenses:        
Research and development [1] 1,518 595 3,861 1,370
Sales and marketing [1] 5,083 2,152 12,209 6,000
General and administrative [1] 3,839 1,966 9,627 5,542
Total operating expenses 10,440 4,713 25,697 12,912
Loss from operations (9,691) (4,281) (23,649) (11,907)
Interest income (expense), net (14) 5 (35) 14
Other income (expense), net (2) (11) 983 69
Net loss $ (9,707) $ (4,287) $ (22,701) $ (11,824)
Net loss per share - basic and diluted $ (0.09) $ (0.04) $ (0.20) $ (0.12)
Weighted average common shares used to compute basic and diluted net loss per common share 112,077,133 103,200,612 110,904,824 99,555,194
Product [Member]        
Revenue:        
Revenue $ 1,614 $ 1,217 $ 4,748 $ 3,128
Cost of revenue:        
Cost of revenue [1] 694 670 2,167 1,793
Genetics [Member]        
Revenue:        
Revenue 49 22 208 64
Cost of revenue:        
Cost of revenue [1] 223 133 746 394
Service [Member]        
Revenue:        
Revenue 3   5 13
Cost of revenue:        
Cost of revenue [1]   4   13
Cost Of Revenue [Member]        
Operating expenses:        
Stock-based compensation expense 50 20 137 73
Research And Development [Member]        
Operating expenses:        
Stock-based compensation expense 115 16 235 17
Sales And Marketing [Member]        
Operating expenses:        
Stock-based compensation expense 367 31 843 116
General And Administrative [Member]        
Operating expenses:        
Stock-based compensation expense $ 646 $ 343 $ 1,734 $ 915
[1] Non-cash stock-based compensation expense included in cost of revenue and operating expenses
v3.21.2
Consolidated Statements Of Changes In Stockholders' Equity - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Total
Balance (in shares) at Dec. 31, 2019 97,286,157      
Balance at Dec. 31, 2019 $ 97 $ 430,802 $ (422,161) $ 8,738
Net loss     (3,706) (3,706)
Common stock issued in conjunction with exercise of stock options (in shares) 2,500      
Common stock issued in conjunction with exercise of stock options   1   1
Stock-based compensation expense   269   269
Balance (in shares) at Mar. 31, 2020 97,288,657      
Balance at Mar. 31, 2020 $ 97 431,072 (425,867) 5,302
Balance (in shares) at Dec. 31, 2019 97,286,157      
Balance at Dec. 31, 2019 $ 97 430,802 (422,161) 8,738
Net loss       (11,824)
Balance (in shares) at Sep. 30, 2020 104,041,493      
Balance at Sep. 30, 2020 $ 104 448,431 (433,985) 14,550
Balance (in shares) at Mar. 31, 2020 97,288,657      
Balance at Mar. 31, 2020 $ 97 431,072 (425,867) 5,302
Net loss     (3,831) (3,831)
Common stock issued in conjunction with exercise of stock options (in shares) 247,625      
Common stock issued in conjunction with exercise of stock options   295   295
Common stock issued for restricted stock awards (in shares) 178,470      
Common stock issued for restricted stock awards   122   122
Stock-based compensation expense   320   320
Common stock issued in conjunction with warrant exercises (in shares) 2,810,338      
Common stock issued in conjunction with warrant exercises $ 4 5,055   5,059
Balance (in shares) at Jun. 30, 2020 100,525,090      
Balance at Jun. 30, 2020 $ 101 436,864 (429,698) 7,267
Net loss     (4,287) (4,287)
Common stock issued in conjunction with exercise of stock options (in shares) 277,167      
Common stock issued in conjunction with exercise of stock options   508   508
Common stock issued for restricted stock awards (in shares) 89,236      
Common stock issued for restricted stock awards   61   61
Stock-based compensation expense   349   349
Common stock and warrants issued in conjunction with private placement sale, net of issuance costs (in shares) 3,150,000      
Common stock and warrants issued in conjunction with private placement sale, net of issuance costs $ 3 10,649   10,652
Balance (in shares) at Sep. 30, 2020 104,041,493      
Balance at Sep. 30, 2020 $ 104 448,431 (433,985) 14,550
Balance (in shares) at Dec. 31, 2020 104,619,876      
Balance at Dec. 31, 2020 $ 105 449,680 (440,066) 9,719
Net loss     (5,920) (5,920)
Common stock issued in conjunction with exercise of stock options (in shares) 196,976      
Common stock issued in conjunction with exercise of stock options   317   317
Common stock issued in conjunction with public offering, net of issuance costs (in shares) 6,900,000      
Common stock issued in conjunction with public offering, net of issuance costs $ 7 47,713   47,720
Stock-based compensation expense   489   489
Balance (in shares) at Mar. 31, 2021 111,716,852      
Balance at Mar. 31, 2021 $ 112 498,199 (445,986) 52,325
Balance (in shares) at Dec. 31, 2020 104,619,876      
Balance at Dec. 31, 2020 $ 105 449,680 (440,066) 9,719
Net loss       (22,701)
Balance (in shares) at Sep. 30, 2021 112,100,049      
Balance at Sep. 30, 2021 $ 112 501,159 (462,767) 38,504
Balance (in shares) at Mar. 31, 2021 111,716,852      
Balance at Mar. 31, 2021 $ 112 498,199 (445,986) 52,325
Net loss     (7,074) (7,074)
Common stock issued in conjunction with exercise of stock options (in shares) 305,090      
Common stock issued in conjunction with exercise of stock options   304   304
Common stock issued in conjunction with public offering, net of issuance costs   1   1
Common stock issued for restricted stock awards (in shares) 36,092      
Common stock issued for restricted stock awards   267   267
Stock-based compensation expense   1,015   1,015
Balance (in shares) at Jun. 30, 2021 112,058,034      
Balance at Jun. 30, 2021 $ 112 499,786 (453,060) 46,838
Net loss     (9,707) (9,707)
Common stock issued in conjunction with exercise of stock options (in shares) 14,515      
Common stock issued in conjunction with exercise of stock options   58   58
Common stock issued in conjunction with public offering, net of issuance costs   137   137
Common stock issued for restricted stock awards (in shares) 27,500      
Common stock issued for restricted stock awards   108   108
Stock-based compensation expense   1,070   1,070
Balance (in shares) at Sep. 30, 2021 112,100,049      
Balance at Sep. 30, 2021 $ 112 $ 501,159 $ (462,767) $ 38,504
v3.21.2
Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Sep. 30, 2020
Private Placement [Member]    
Stock issued, issuance costs   $ 373
Public Offering Of Common Stock [Member]    
Stock issued, issuance costs $ 500  
v3.21.2
Condensed Consolidated Statements Of Cash Flows - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Cash flows from operating activities:    
Net loss $ (22,701) $ (11,824)
Adjustments to reconcile net loss to net cash used in operating activities:    
Non-cash lease expense 35 10
Depreciation and amortization 238 178
Stock-based compensation expense 2,949 1,121
Loss on sale and disposal of property and equipment 1 3
Forgiveness of PPP loan (1,006)  
Changes in operating assets and liabilities:    
Accounts receivable (238) 76
Prepaid expenses and other assets 262 248
Inventories (107) (20)
Accounts payable, accrued liabilities and other liabilities 821 230
Net cash used in operating activities (19,746) (9,978)
Cash flows from investing activities:    
Purchase of property and equipment (154) (267)
Net cash used in investing activities (154) (267)
Cash flows from financing activities:    
Principal repayment of DECD loan (148) (143)
Proceeds from issuance of common stock from exercise of stock options 679 804
Proceeds from PPP loan   1,006
Proceeds from exercise of warrants   5,059
Proceeds from private placement, net of issuance costs   10,652
Proceeds from public offering 48,236  
Payment of offering costs for public offering (378)  
Net cash provided by financing activities 48,389 17,378
Net increase in cash, cash equivalents and restricted cash 28,489 7,133
Cash, cash equivalents and restricted cash, beginning of period 16,631 11,703
Cash, cash equivalents and restricted cash, end of period 45,120 18,836
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest 57 27
Supplemental disclosure of noncash investing and financing activities:    
Net (decrease) increase in right-of-use assets $ (45) 369
Net changes in accounts payable related to capital expenditures   $ 154
v3.21.2
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies
9 Months Ended
Sep. 30, 2021
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies [Abstract]  
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies 1.    ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Organization

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 reflex intended to maintain OVA1’s high sensitivity while improving specificity; (3) OVA1plus, a reflex offering, which uses OVA1 and OVERA as a confirmation for OVA1 intermediate range results and leverages the strengths of OVA1’s Multivariate Index Assay (“MIA”) sensitivity and OVERA’s (MIA2G) specificity and as a result reduces false elevations by over 40%; (4) Aspira GenetiX, a genetic test for hereditary gynecological cancer risk, with a core focus on female cancers, including breast, ovarian, endometrial, uterine and cervical cancers; and (5) Aspira Synergy, the Company’s new decentralized wet-lab testing platform and cloud service technology. Through September 30, 2021, the Company’s product and related services revenue was limited to revenue generated by sales of OVA1, OVA1plus and Aspira GenetiX.  The 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”). In 2021, the Company began to enter into decentralized arrangements with large healthcare networks and large practices for its Aspira Synergy product. The Company has entered into four technology transfer agreements since the launch of Aspira Synergy. Two of the agreements are with two of the nation’s largest and leading independent women’s healthcare groups.  The other two agreements are with two independent laboratories providing services across five states.

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 $462,767,000. The Company also expects to incur a net loss and negative cash flows from operations for the remainder of 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 through the first quarter 2021. We began exceeding pre-COVID-19 levels starting in the first half of the second quarter of 2021 but began trending down in the latter half of the second quarter of 2021 as physician offices had fewer patient visits. In addition, during the third quarter of 2021, the Company experienced additional restrictions to doctor offices in key states such as Michigan, Florida, New York and Kentucky when compared to the second quarter 2021. 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, Key Opinion Leader

presentations, and increased digital sales and marketing. Enrollment for clinical research studies has been slower than originally planned due to the impact of clinic closures and patients not seeking medical care in 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 operations or liquidity.

 

As discussed in Note 3, in March 2016, the Company entered into a loan agreement (as amended on March 7, 2018 and April 3, 2020, the “DECD 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 DECD Loan Agreement. On December 3, 2020, the Company received a disbursement of the remaining $2,000,000 under the DECD Loan Agreement, as the Company had achieved the target employment milestone necessary to receive an additional $1,000,000 under the DECD Loan Agreement and the DECD determined to fund the remaining $1,000,000 under the DECD 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.

 

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 3, 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 4, during June 2020, all of the warrants from the Company’s 2017 private placement were exercised.  The Company received $5,058,608 in aggregate proceeds from the exercise of the warrants.

 

As discussed in Note 4, on July 20, 2020, the Company completed a private placement of Aspira common stock, par value $0.001 per share, for net proceeds of $10,600,000, after deducting expenses related to the private placement.

 

As discussed in Note 4, on February 8, 2021, the Company completed a public offering (the “2021 Offering”) resulting in net proceeds of approximately $47,900,000, after deducting underwriting discounts and offering expenses. 

 

As discussed in Note 3, in March 2021, the Company applied for forgiveness of the PPP Loan, and, effective May 27, 2021, the SBA confirmed the waiver of the Company’s repayment of the PPP Loan. The Company remains subject to an audit of the PPP loan. The Company recognized a gain on forgiveness of debt of $1,005,767, which is included in other income in the condensed consolidated statements of operations, and reduced long- and short-term indebtedness by the same amount. 

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.

The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or

have access to the audited consolidated financial statements for the preceding fiscal year. The condensed consolidated balance sheet at December 31, 2020 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in Aspira’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 31, 2021 (the “2020 Annual Report”).

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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results.

Reclassification

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

Significant Accounting and Reporting Policies

Revenue Recognition

Product Revenue – OVA1, OVERA and OVA1plus: The Company recognizes product revenue in accordance with the provisions of ASC Topic 606, Revenue from Contracts with Customers (“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 period ended September 30, 2021, 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 periods ended September 30, 2021 and 2020.

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 in vitro diagnostic (“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, Inc. (“ASPiRA IVD”) trial services in the fourth quarter of 2019.  During 2020 and 2021, the Company’s service revenue was limited to the fulfillment of one legacy IVD contract.  

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board issued Accounting Standard Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). 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 2016-13 is scheduled to be effective in 2023 for smaller reporting companies. The Company is currently assessing the impact of this standard on its consolidated financial statements.
v3.21.2
Agreements With Quest Diagnostics Incorporated
9 Months Ended
Sep. 30, 2021
Agreements With Quest Diagnostics Incorporated [Abstract]  
Agreements With Quest Diagnostics Incorporated

2.    AGREEMENTS WITH QUEST DIAGNOSTICS INCORPORATED

In March 2015, the Company reached an agreement with Quest Diagnostics, Inc. (“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.
v3.21.2
Commitments And Contingencies
9 Months Ended
Sep. 30, 2021
Commitments And Contingencies [Abstract]  
Commitments And Contingencies 3.    COMMITMENTS AND CONTINGENCIES

Coronavirus Aid, Relief, and Economic Security (CARES) Act and PPP 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 Loan, all or a portion of the principal amount of the PPP Loan was 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 used 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, was set to mature on May 1, 2022. The Company applied for forgiveness of the PPP Loan in March 2021, and, effective May 27, 2021, the SBA confirmed the waiver of the Company’s repayment of the PPP Loan. The Company recognized a gain on forgiveness of debt of $1,005,767, which is included in other income in the condensed consolidated statements of operations, and reduced long- and short-term indebtedness by the same amount. The Company remains subject to an audit of the PPP loan.

Development Loan

 

On March 22, 2016, the Company entered into the DECD Loan Agreement, 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 DECD Loan Agreement. On December 3, 2020, the Company received a disbursement of the remaining $2,000,000 under the DECD Loan Agreement, as the Company had achieved the target employment milestone necessary to receive an additional $1,000,000 under the DECD Loan Agreement and the DECD determined to fund the remaining $1,000,000 under the DECD 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 DECD 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.

Long-term debt consisted of the following:

September 30,

December 31,

2021

2020

(in thousands)

DECD loan, net of issuance costs

$

2,968

$

3,116

PPP loan

-

1,006

Total debt

2,968

4,122

Less: Current portion, net of issuance costs

(200)

(645)

Total long-term debt, net of issuance costs

$

2,768

$

3,477

As of September 30, 2021, the annual amounts of future minimum principal payments due under the Company’s contractual obligation are shown in the table below. Unamortized debt issuance costs for the DECD loan were $16,000

Payments Due by Period

(in thousands)

Total

2021

2022

2023

2024

2025

Thereafter

DECD Loan

$

2,984

$

51

$

204

$

406

$

452

$

461

$

1,410

Total

$

2,984

$

51

$

204

$

406

$

452

$

461

$

1,410

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 $0 and $611,000 as of September 30, 2021 and December 31, 2020, respectively. These notes were payable in ten monthly installments with a maturity date of October 1, 2021.

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 research and development services is located in Trumbull, Connecticut.  In October 2020, the Company renewed the Austin, Texas lease for an additional one 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 three and nine months ended September 30, 2021 and 2020 is shown in the table below (in thousands).

Three Months Ended September, 30

Lease Cost

Classification

2021

2020

Operating rent expense

Cost of revenue

$

14

$

13

Research and development

13

9

Sales and marketing

8

8

General and administrative

16

15

Variable rent expense

Cost of revenue

$

8

$

8

Research and development

12

4

Sales and marketing

11

12

General and administrative

16

17

Nine Months Ended September, 30

Lease Cost

Classification

2021

2020

Operating rent expense

Cost of revenue

$

42

$

41

Research and development

35

29

Sales and marketing

25

16

General and administrative

51

39

Variable rent expense

Cost of revenue

$

23

$

19

Research and development

25

11

Sales and marketing

30

34

General and administrative

46

45

Based on the Company’s leases as of September 30, 2021, 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

$

22

2022

95

2023

106

2024

116

2025

124

2026

64

Total Operating Lease Payments

527

Less: Interest

(105)

Present Value of Lease Liabilities

$

422

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

Weighted-average remaining lease term (in years)

4.7

Weighted-average discount rate

9.34%

Non-cancelable Royalty Obligations

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 three months ended September 30, 2021 and 2020 totaled $65,000 and $48,000, respectively, and royalty expense for the nine months ended September 30, 2021 and 2020 totaled $190,000 and $124,000, respectively, as recorded in cost of revenue in the condensed consolidated statements of operations.

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.

v3.21.2
Stockholders' Equity
9 Months Ended
Sep. 30, 2021
Stockholders' Equity [Abstract]  
Stockholders' Equity 4.    STOCKHOLDERS’ EQUITY

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.

2021 Public Offering

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 Aspira common stock at a price to the public of $7.50 per share. The 2021 Underwriters purchased these 6,000,000 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 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 additional 900,000 shares of Aspira common stock, closed on February 8, 2021 and resulted in net proceeds to the Company of approximately $47.9 million, after deducting underwriting discounts and offering expenses.

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 September 30, 2021, 10,514,967 shares of Aspira common stock were subject to outstanding stock options, and 14,374 shares of Aspira common stock were subject to unvested restricted stock awards and a total of 3,501,145 shares of Aspira common stock were reserved for issuance under the 2019 Plan.

Stock-Based Compensation

During the three months ended March 31, 2021, the Company granted the following awards under the 2019 Plan:

Grant Date

Number of Shares

Type of Award

Exercise Price / Share

Fair Value / Share

1/28/2021

262,000

Options

$            7.79

$         4.95

3/19/2021

1,971,912

Options

$            7.40

$         4.71

3/19/2021

350,000

Performance Options

$            7.40

$         4.71

3/19/2021

75,988

Restricted Stock Units

$                 -

$              -

2,659,900

During the three months ended June 30, 2021, the Company granted the following awards under the 2019 Plan:

Grant Date

Number of Shares

Type of Award

Exercise Price

Fair Value / Share

5/6/2021

210,720 

Options

$            4.92

$         3.13

5/6/2021

423 

Restricted Stock Units

$                 -

$              -

6/24/2021

313,502 

Options

$            5.90

$         3.73

6/24/2021

330 

Restricted Stock Units

$                 -

$              -

524,975 


During the three months ended September 30, 2021, the Company granted the following awards under the 2019 Plan:

Grant Date

Number of Shares

Type of Award

Exercise Price

Fair Value / Share

8/19/2021

48,000 

Options

$            3.52

$         2.22

9/30/2021

389,000 

Options

$            3.25

$         2.05

437,000 

The allocation of employee stock-based compensation expense by functional area for the three and nine months ended September 30, 2021 and 2020 was as follows:

 

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2021

2020

2021

2020

Cost of revenue

$

44

$

18

$

122

$

66

Research and development

113

15

231

16

Sales and marketing

350

31

815

111

General and administrative

445

228

1,236

722

Total

$

952

$

292

$

2,404

$

915

v3.21.2
Loss Per Share
9 Months Ended
Sep. 30, 2021
Loss Per Share [Abstract]  
Loss Per Share 5.    LOSS PER SHARE

The Company calculates basic loss per share using the weighted average number of shares of Aspira common stock outstanding during the period. Because the Company is in a net loss position, diluted loss per share is calculated using the weighted average number of shares of Aspira common stock outstanding and excludes the effects of 10,529,341 and 8,451,788 potential shares of Aspira common stock as of September 30, 2021 and 2020, respectively, that are anti-dilutive. Potential shares of Aspira common stock include incremental shares of Aspira common stock issuable upon the exercise of stock options and unvested restricted stock units.

v3.21.2
Commitments And Contingencies (Tables)
9 Months Ended
Sep. 30, 2021
Commitments And Contingencies [Abstract]  
Schedule of Long-term Debt

September 30,

December 31,

2021

2020

(in thousands)

DECD loan, net of issuance costs

$

2,968

$

3,116

PPP loan

-

1,006

Total debt

2,968

4,122

Less: Current portion, net of issuance costs

(200)

(645)

Total long-term debt, net of issuance costs

$

2,768

$

3,477

Annual Amounts of Future Minimum Principal Payments Due Under Certain Contractual Obligations

Payments Due by Period

(in thousands)

Total

2021

2022

2023

2024

2025

Thereafter

DECD Loan

$

2,984

$

51

$

204

$

406

$

452

$

461

$

1,410

Total

$

2,984

$

51

$

204

$

406

$

452

$

461

$

1,410

Expense Associated with Operating Leases

Three Months Ended September, 30

Lease Cost

Classification

2021

2020

Operating rent expense

Cost of revenue

$

14

$

13

Research and development

13

9

Sales and marketing

8

8

General and administrative

16

15

Variable rent expense

Cost of revenue

$

8

$

8

Research and development

12

4

Sales and marketing

11

12

General and administrative

16

17

Nine Months Ended September, 30

Lease Cost

Classification

2021

2020

Operating rent expense

Cost of revenue

$

42

$

41

Research and development

35