| · |
|---|
| · · PageNo. |
|---|
| PART I | | 7 | |
|---|
| | ITEM 1. | Business | | 7 |
|---|
| | ITEM 1A. | Risk Factors | | 25 |
|---|
| | ITEM 1B. | Unresolved Staff Comments | | 43 |
|---|
| | ITEM 1C. | Cybersecurity | | 43 |
|---|
| | ITEM 2. | Properties | | 44 |
|---|
| | ITEM 3. | Legal Proceedings | | 44 |
|---|
| | ITEM 4. | Mine Safety Disclosures | | 44 |
|---|
| PART II | | 45 | |
|---|
| | ITEM 5. | Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 45 |
|---|
| | ITEM 6. | [Reserved] | | 45 |
|---|
| | ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 46 |
|---|
| | ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk | | 59 |
|---|
| | ITEM 8. | Consolidated Financial Statements and Supplementary Data | | 59 |
|---|
| | ITEM 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | 59 |
|---|
| | ITEM 9A. | Controls and Procedures | | 59 |
|---|
| | ITEM 9B. | Other Information | | 61 |
|---|
| | ITEM 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | 61 |
|---|
| PART III | | 61 | |
|---|
| | ITEM 10. | Directors, Executive Officers and Corporate Governance | | 61 |
|---|
| | ITEM 11. | Executive Compensation | | 61 |
|---|
| | ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 61 |
|---|
| | ITEM 13. | Certain Relationships and Related Transactions, and Director Independence | | 62 |
|---|
| | ITEM 14. | Principal Accountant Fees and Services | | 62 |
|---|
| PART IV | | 62 | |
|---|
| | ITEM 15. | Exhibits and Financial Statement Schedules | | 62 |
|---|
| SIGNATURES | | 68 | |
|---|
The following are registered and unregistered trademarks and service marks of Aspira Women’s Health Inc.: VERMILLIONSM*, ASPIRA WOMEN’S HEALTH*®, OVA1®, OVERA®, ASPIRA LABS®, OVACALC®, OVASUITESM*, ASPIRA GENETIXSM, OVA1PLUS*®, OVAWATCH®, ENDOCHECKSM*, ENDOINFORMTM, OVAINFORMTM, OVAINHERITSM, ASPIRA SYNERGY*®,, OVA360SM*, ASPIRA IVDSM, and YOUR HEALTH, OUR PASSION*®.
i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), about us and our industry that involve substantial risks and uncertainties.
These statements involve a number of risks and uncertainties. Words such as “may,” “expects,” “intends,” “anticipates,” “believes,” “estimates,” “plans,” “seeks,” “could,” “should,” “continue,” “will,” “potential,” “targeted,” “predicts,” “projects,” “aim” and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements speak only as of the date on which this report was filed with the Securities and Exchange Commission (the “SEC”), and, except as required by law, Aspira Women’s Health Inc. (“Aspira” and, together with its subsidiaries, the “Company,” “we,” “our,” or “us”) does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after such date.
Examples of forward-looking statements include, without limitation:
| ● | projections or expectations regarding our future test volumes, revenue, average unit price, cost of revenue, operating expenses, research and development expenses, gross profit margin, cash flow, results of operations and financial condition; |
| ● | our plan to broaden our commercial focus from ovarian cancer to differential diagnosis of women with a range of gynecological diseases, including additional pelvic disease conditions such as endometriosis and benign pelvic mass monitoring; |
| ● | our planned business strategy and the anticipated effects thereof, including partnerships such as those based on our Aspira Synergy platform, specimen or research collaborations, licensing arrangements, commercial collaborations and distribution agreements; |
| ● | plans to expand our current or future products to markets outside of the United States through distribution collaborations or out-licensing; |
| ● | plans to develop new algorithms, molecular diagnostic tests, products and tools and otherwise expand our product offerings; |
| ● | plans to develop, launch and establish payer coverage and secure contracts for current and new products, including ENDOinform and OVAinform; |
| ● | expectations regarding local and/or national coverage under Novitas, our Medicare Administrative Carrier; |
| ● | anticipated efficacy of our products, product development activities and product innovations, including our ability to improve sensitivity and specificity over traditional diagnostics; |
| ● | expected competition in the markets in which we operate; |
| ● | plans with respect to Aspira Labs, Inc. (“Aspira Labs”), including plans to expand Aspira Labs’ testing capabilities, specifically molecular lab capabilities; |
| ● | expectations regarding continuing future services provided by Quest Diagnostics Incorporated; |
| ● | expectations regarding continuing future services provided by BioReference Health, LLC; |
| ● | plans to develop informatics products as laboratory developed tests (“LDTs”) and potential Food and Drug Administration (“FDA”) oversight changes of LDTs; |
| ● | expectations regarding existing and future collaborations and partnerships for our products, including plans to enter into decentralized arrangements for our Aspira Synergy platform and to provide and expand access to our risk assessment tests; |
| ● | plans regarding future publications and presentations; |
| ● | expectations regarding potential collaborations with governments, legislative bodies and advocacy groups to enhance awareness and drive policies to provide broader access to our tests; |
| ● | our ability to continue to comply with applicable governmental regulations, including regulations applicable to the operation of our clinical lab, expectations regarding pending regulatory submissions and plans to seek regulatory approvals for our tests within the United States and internationally, as applicable; |
| ● | our continued ability to expand and protect our intellectual property portfolio; |
| ● | anticipated liquidity and capital requirements; |
| ● | anticipated future losses and our ability to continue as a going concern; |
| ● | expectations regarding raising capital and the amount of financing anticipated to be required to fund our planned operations; |
| ● | expectations regarding attrition and recruitment of top talent; |
| ● | expectations regarding the results of our clinical research studies and our ability to recruit patients to participate in such studies; |
| ● | our ability to use our net operating loss carryforwards and anticipated future tax liability under U.S. federal and state income tax legislation; |
| ● | expected market adoption of our current and prospective diagnostic tests, including Ova1, Overa, Ova1Plus, OvaWatch, ENDOinform and OVAinform, as well as our Aspira Synergy platform; |
| ● | expectations regarding our ability to launch new products we develop, license, co-market or acquire; |
| ● | expectations regarding the size of the markets for our products; |
| ● | expectations regarding reimbursement for our products, and our ability to obtain such reimbursement, from third-party payers such as private insurance companies and government insurance plans; |
| ● | potential plans to pursue clearance designation with the FDA with respect to OvaWatch, ENDOinform and OVAinform; |
| ● | expected potential target launch timing for future products; |
| ● | expectations regarding compliance with federal and state laws and regulations relating to billing arrangements conducted in coordination with laboratories; |
| ● | plans to advocate for legislation and professional society guidelines to broaden access to our products and services; |
| ● | ability to protect and safeguard against cybersecurity risks and breaches; and |
| ● | expectations regarding the results of our academic research agreements. |
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 10-K.
Other sections of this Annual Report on Form 10-K may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.
Forward-looking statements are subject to significant risks and uncertainties, including those discussed in Part I Item 1A, “Risk Factors,” that could cause actual results to differ materially from those projected in such forward-looking statements due to various factors, including our ability to continue as a going concern; impacts resulting from potential changes to coverage of Ova1 through our Medicare Administrative Carrier for Ova1; anticipated use of capital and its effects; our ability to increase the volume of our product sales; failures by third-party payers to reimburse for our products and services or changes to reimbursement rates; our ability to continue developing existing technologies and to develop, protect and promote our proprietary technologies; plans to develop and perform LDTs; our ability to comply with FDA regulations that relate to our products and to obtain any FDA clearance or approval required to develop and commercialize medical devices; our ability to develop and commercialize additional diagnostic products and achieve market acceptance with respect to these products; our ability to compete successfully; our ability to obtain any regulatory approval required for our future diagnostic products; our or our suppliers’ ability to comply with FDA requirements for production, marketing and post-market monitoring of our products; our ability to maintain sufficient or acceptable supplies of immunoassay kits from our suppliers; in the event that we succeed in commercializing our products outside the United States, the political, economic and other conditions affecting other countries; changes in healthcare policy; our ability to comply with environmental laws; our ability to comply with the additional laws and regulations that apply to us in connection with the operation of Aspira Labs; our ability to use our net operating loss carryforwards; our ability to use intellectual property; our ability to successfully defend our proprietary technology against third parties; our ability to obtain licenses in the event a third party successfully asserts proprietary rights; the liquidity and trading volume of our common stock; the concentration of ownership of our common stock; our ability to retain key employees; our ability to secure additional capital on acceptable terms to execute our business plan; business interruptions or force majeure or acts of God; the effectiveness and availability of our information systems; our ability to integrate and achieve anticipated results from any acquisitions or strategic alliances; future litigation against us, including infringement of intellectual property and product liability exposure; and additional costs that may be required to make further improvements to our laboratory operations.
SUMMARY OF RISK FACTORS
The following is only a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in the section entitled “Item 1A. Risk Factors” in this report.
Risks Related to Our Business and Industry
| ● | If we are unable to increase the volume of OvaSuite sales, our business, results of operations and financial condition will be adversely affected. |
| ● | There is substantial doubt about our ability to continue as a going concern, and this may adversely affect our stock price and our ability to raise capital. |
| ● | We will need to sell additional shares of our common stock or other securities in the future to meet our capital requirements, which could cause significant dilution. |
| ● | We will need to raise additional capital in the future, and if we are unable to secure adequate funds on terms acceptable to us, we may be unable to execute our business plan. |
| ● | Failures by third-party payers to reimburse for our products and services or changes in reimbursement rates could materially and adversely affect our business, financial condition and results of operations. In addition, changes in medical society guidelines may also adversely affect payers and result in a material change in coverage, adversely affecting our business, financial condition and results of operations. |
| ● | Failure to continue coverage of Ova1 through Novitas, our Medicare Administrative Contractor for Ova1, could materially and adversely affect our business, financial condition and results of operation. |
| ● | Failure to expand commercial, Medicare or Medicaid coverage for our products could materially and adversely affect our business, financial condition and results of operations. |
| ● | We may not succeed in improving existing or developing additional diagnostic products, and, even if we do succeed in developing additional diagnostic products, the diagnostic products may never achieve significant commercial market acceptance. |
| ● | The diagnostics market is competitive, and we may not be able to compete successfully, which would adversely impact our ability to generate revenue. |
| ● | We are currently offering and developing multiple tests as LDTs and intend to develop and perform LDTs at Aspira Labs in the future. If the FDA were to begin actively regulating our tests, we would incur substantial costs and delays associated with an effort to obtain premarket 510(k) clearance, de novo classification, or premarket approval and incur costs related to compliance with post-market controls. |
| ● | Certain of our diagnostic tests and associated software are subject to ongoing regulation by the FDA, and we may develop additional FDA-regulated diagnostic tests and software in the future. Any failure to comply with applicable FDA regulations for our current FDA regulated products, and any delay by or failure of the FDA to authorize future products we submit to the FDA may adversely affect our business, results of operations and financial condition. |
| ● | If we or our suppliers fail to comply with FDA requirements for production, marketing and post-market monitoring of our products, we may not be able to market our products and services and may be subject to stringent penalties, product restrictions or recall. |
| ● | If our suppliers fail to produce acceptable or sufficient stock, fail to supply stock due to supply shortages, make changes to the design or labeling of their biomarker kits or discontinue production of existing biomarker kits or instrument platforms, we may be unable to meet market demand for OvaSuite products. |
| ● | Changes in healthcare policy could increase our costs and adversely impact sales of and reimbursement for our tests, which would have an adverse effect on our business, financial condition and results of operations. |
| ● | We are subject to environmental laws and have potential exposure to environmental liabilities. |
| ● | The operation of Aspira Labs requires us to comply with numerous laws and regulations, which is expensive and time-consuming and could adversely affect our business, financial condition and results of operations, and any failure to comply could result in exposure to substantial penalties and other harm to our business. |
| ● | Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. |
| ● | If we are able to reinstate the ARPA-H award and yet are unable to complete the required milestones under our federal award milestone-based funding agreement, our business, results of operations and financial condition would be adversely affected. |
| ● | Failure to renew our Quest Diagnostics agreement could impact our business. |
Risks Related to Intellectual Property and Product Liability
| ● | If we fail to maintain our rights to utilize intellectual property directed to diagnostic biomarkers, we may not be able to offer diagnostic tests using those biomarkers. |
| ● | If a third party infringes on our proprietary rights, we may lose any competitive advantage we have as a result of diversion of our time, enforcement costs and the loss of the exclusivity of our proprietary rights. |
| ● | If others successfully assert their proprietary rights against us, we may be precluded from making and selling our products or we may be required to obtain licenses to use their technology. |
| ● | Our diagnostic efforts may cause us to have significant product liability exposure. |
| ● | Certain of our patent registrations will expire, which may cause us to have significant competition. |
Operational Risks
| ● | Because our business is highly dependent on key executives and employees, our inability to recruit and retain these people could hinder our business plans. |
| ● | Business interruptions could limit our ability to operate our business. |
| ● | The operation of Aspira Labs and our Aspira Synergy business depends on the effectiveness and availability of our information systems, including the information systems we use to provide services to our customers and to store employee data. If our information technology systems or those third parties upon which we rely or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. |
| ● | We selectively explore acquisition opportunities and strategic alliances relating to other businesses, products or technologies. We may not be successful in integrating other businesses, products or technologies with our |
business. Any such transaction also may not produce the results we anticipate, which could adversely affect our business, financial condition and results of operations.
| ● | Future litigation by or against us could be costly and time-consuming to prosecute or defend. |
Risks Related to Owning Our Stock
| ● | There is a limited market for our Common Stock. |
| ● | If we fail to maintain compliance with the OTC QX minimum listing requirements, our common stock will be subject to removal to the OTC QB market. Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if our common stock is downgraded. |
| ● | The liquidity and trading volume of our common stock may be low, and our ownership is concentrated, which could adversely impact the trading price of our common stock and our stockholders’ ability to obtain liquidity. |
| ● | Our stock price has been, and may continue to be, highly volatile. |
| ● | Anti-takeover provisions in our charter, bylaws, other agreements and under Delaware law could make a third-party acquisition of the Company difficult. |
| ● | If we raise additional capital in the future, your ownership in us could be diluted. |
| ● | Sales of a substantial number of our shares of common stock in the public market could cause our stock price to fall. |
| ● | Because we do not currently intend to declare cash dividends on our shares of common stock in the foreseeable future, stockholders must rely on appreciation of the value of our common stock for any return on their investment. |
| ● | The exercise of our outstanding options and warrants will dilute stockholders and could decrease our stock price. |
