AWHL 10-K & 10-Q changes, risk factors and insider trading

As of December 31, 2024,2025, we had 17,407,12043,480,411 shares of our common stock outstanding and 530,613790,376 shares of our common stock reserved for future issuance to employees, directors and consultants pursuant to our employee stock plans, which excludes 876,2493,114,229 shares of our common stock that were subject to outstanding options and 149,061 restricted stock units.options. In addition, as of December 31, 2024,2025, warrants to purchase 4,475,068 21,235,745 shares of our common stock were outstanding. These warrants are exercisable at the election of the holders thereof, in accordance with the terms of the related warrant, at an average exercise price of $2.90$0.98 per share.

The great majority of laboratory tests in the United States are paid for by third party payers. Accordingly, our current revenues are from, and our future revenues will be dependent upon, third-party reimbursement payments to Aspira Labs. Insurance coverage and reimbursement rates for diagnostic tests are uncertain, subject to change and particularly volatile during the early stages of commercialization. There remain questions as to what extent third-party payers, like Medicare, Medicaid and private insurance companies will provide coverage for our products and for which indications. Some payers have determined not to cover our tests. While Novitas Solutions, the Medicare Administrative Contractor responsible for paying Medicare claims for all Aspira laboratory tests, has determined to cover Ova1, there is no assurance that they will continue to do so. Moreover, while The CentersCMS for Medicare & Medicaid Services (“CMS”) has issued PAMA reimbursement rates for Ova1 effective January 1, 2018, there is no guarantee that the payment rates will not be reduced. Although the PAMA legislation allows for no more than a 15% fee reduction between 2025 and 2026, uncertainty regarding reimbursement rates could create payment uncertainty from other payers as well. The reimbursement rates for Ova1 and OvaWatch are reviewed by third-party payers. We have experienced volatility in the coverage and reimbursement of our products due to contract negotiation with third-party payers and implementation requirements, and the reimbursement amounts we have received from third-party payers varies from payer to payer, and, in some cases, the variance could be material.

Our success depends on our ability to continue to develop and commercialize diagnostic products. There is considerable risk in developing diagnostic products based on our biomarker discovery efforts, as candidate biomarkers may fail to demonstrate clinical validity in larger clinical studies or may not achieve acceptable levels of analytical accuracy. For example, markers being evaluated for one or more next-generation diagnostic tests may not be validated in downstream pre-clinical or clinical studies, once we undertake and perform such studies. In addition, development of products combining biomarkers with imaging, patient risk factors or other risk indicators carry higher than average risks due to technical, clinical and regulatory uncertainties. While we have a published proof of concept on combining Ova1 and imaging, for example, our ability to develop, verify and validate an algorithm that generalizes to routine testing populations cannot be guaranteed. In addition, our efforts to develop other diagnostic tests, such as ENDOinform and OVAinform, are in the earlydevelopment development phase, and future pre-clinical or clinical studies may not support our early data. If successful, the regulatory pathway and clearance/approval process may require extensive discussion with applicable authorities and possibly advisory panels. These pose considerable risk in projecting launch dates, requirements for clinical evidence and eventual pricing and return on investment. Although we are engaging important stakeholders representing gynecologic oncology, benign gynecology, patient advocacy, women’s health research, legislators, payers, and others, success, timelines and value will be uncertain and require active management at all stages of innovation and development.

Competitive offerings include Fujirebio Diagnostics’ FDA cleared ROMA test. ROMA combines two tumor markers and menopausal status into a numerical score using a publicly available algorithm. ROMA is a competitive test with the Ova1Plus workflow that has adversely impacted and may continue to materially adversely impact our revenue. In addition, competitors, AOA Dx, ClearNote, Cleo Diagnostics, Mercy BioAnalytics, and others have publicly disclosed that they have been or are currently working on ovarian cancer diagnostic assays. Exact Sciences, Grail, and others are working on multi-cancer early diagnosticMCED tests that include ovarian cancer detection. Academic institutions periodically report new findings in ovarian cancer diagnostics that may have commercial value.

We have priced our products at a point that recognizes the value-added by itstheir increased sensitivity for detecting ovarian malignancy. If others develop a test that is viewed to be similar to any of these products in safety and efficacy but is priced at a lower point, we and/ or our strategic partners may have to lower the price of that product in order to effectively compete, which would impact our margins and potential for profitability.

If we develop tests in the future that are unablesubject to comply with FDA requirements, or to do so within the timeframes specified by the FDA, we may be forced to stop selling our tests or be required to modify claims or make such other changes while we update our processes. For existing or future tests subject to FDA clearance, approval or de novo classification, our business, results of operations and financial condition will be negatively affected until such a review is completed and clearance, approval or de novo classification to market were obtained. There can be no assurance that any tests we develop will be cleared, approved or classified on a timely basis, if at all. Obtaining FDA clearance, approval or de novo classification for diagnostics can be expensive, time consuming and uncertain, and for higher-risk devices generally takes several years and requires detailed and comprehensive scientific and clinical data. Ongoing compliance with FDA regulations for those tests will increase the cost of conducting our business, significantly affect our operations, and could have a significant negative impact on our financial performance.

Our 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 ourfuture diagnostic testsproducts submittedwe submit to the FDA may adversely affect our business, results of operations and financial condition.

Our activitiesSome relatedof toour currently marketed and potential future diagnostic products and associated software are, or havemay in the potential tofuture be, subject to regulatory oversight by the FDA under provisions of the FDC Act and regulations thereunder, including regulations governing the development, marketing, labeling, promotion, manufacturing and export of our products. Failure to comply with applicable pre-market and post-market requirements can lead to sanctions, including withdrawal of products from the market, recalls, refusal to authorize government contracts, product seizures, civil money penalties, injunctions and criminal prosecution.

The FDC Act requires that medical devices introduced to the United States market, unless exempted by regulation, be authorized by FDA pursuant to either the premarket notification pathway, known as 510(k) clearance, the de novo classification pathway, or the PMA pathway. The FDA granted a request for a de novo authorizationclassification for Ova1 in September 2009, and we commercially launched Ova1 in March 2010. In March 2016, we received FDA 510(k) clearance for a second-generation biomarker panel known as Ova1 Next Generation, which we call Overa. Ova1 was the first FDA-clearedFDA-authorized blood test for the pre-operative assessment of ovarian masses. With respect to devices reviewed through the 510(k) process, we may not market a device until it is determined that our product is substantially equivalent to a legally marketed device known as a predicate device. A 510(k) submission may involve the presentation of a substantial volume of data, including clinical and analytical data, as well as extensive information regarding software. The FDA may agree that the product is substantially equivalent to a predicate device and allow the product to be marketed in the United States. On the other hand, the FDA may determine that the device is not substantially equivalent and require a PMA or de novo classification, or require further information, such as additional test data, including data from clinical studies, before it is able to make a determination regarding substantial equivalence. By requesting additional information, the FDA can delay market introduction of our products. Delays in receipt of or failure to receive any necessary 510(k) clearance, de novo classification, or PMA, or the imposition of stringent restrictions on the labeling and sales of our products, could have a material adverse effect on our business, results of operations and financial condition. If the FDA determines that a PMA is required for any of our potential future clinical products, the application will require extensive clinical studies, manufacturing information and could require review by an FDA advisory panel comprising experts outside the FDA. Clinical studies to support a 510(k) submission, de novo classification or a PMA application would need to be conducted in accordance with FDA requirements. Failure to comply with FDA requirements could result in the FDA’s refusal to accept the submission or denial of the application. We cannot ensure that any necessary 510(k) clearance, de novo classification, or PMA will be granted on a timely basis, or at all. To the extent we seek FDA 510(k) clearance, de novo classification or FDA pre-market approval for other diagnostic tests, any delay by or failure of the FDA to clear, classify, or approve those diagnostic tests may adversely affect our consolidated revenues, results of operations and financial condition.

Certain of our software algorithms have been authorized for marketing by FDA as part of our cleared or de novo classified tests.IVDs. If any of the software that we use in our LDTs or that we make available to third parties is determined by FDA to be non-exempt clinical decision support software, this could impede our ability to offer our tests or distribute our software to third parties and we could incur substantial costs and delays associated with trying to obtain premarket 510(k) clearance, de novo classification, or premarket review and incur costs associated with complying with post-market controls.

Additionally, if the FDA were to view any of our actions as non-compliant, it could initiate enforcement actions, such as a warning letter and possible imposition of penalties. For instance, we are subject to a number of FDA requirements, including compliance with the FDA’s QSR QMSR requirements, which establish extensive requirements for quality assurance and control as well as manufacturing procedures. Failure to comply with these regulations could result in enforcement actions for us or our potential suppliers. Adverse FDA actions in any of these areas could significantly increase our expenses and reduce our revenue. We will need to undertake steps to maintain our operations in line with the FDA’s QSRQMSR requirements. Some components of Ova1 and Overa are manufactured by other companies and we are required to ensure that, to the extent that we incorporate those components into our finished Ova1 and Overa products, we use those components in compliance with QSR.QMSR. Any failure to do so would have an adverse effect on our ability to commercialize the Ova1Plus workflow. Our suppliers that manufacture finished devices at their manufacturing facilities that we use in our products and services are subject to periodic regulatory inspections by the FDA and other federal and state regulatory agencies. Our facility also is subject to FDA inspection. We or our suppliers may not satisfy such regulatory requirements, and any such failure to do so may adversely affect our business, financial condition and results of operations.

In June 2014, we launched a clinical laboratory, Aspira Labs, in Texas. Aspira Labs holds a CLIA Certificate of Accreditation and a CAP Certificate of Accreditation, as well as a state laboratory license or permit in California, Maryland, New York, Pennsylvania and Rhode Island. This allows the lab to perform Ova1 and Overa testing (through the Ova1Plus workflow) on a national basis. We are subject to periodic surveys and inspections to maintain our CLIA certification, and such certification is also required to obtain payment from Medicare, Medicaid and certain other third-party payers. Failure to comply with CLIA or state law requirements may result in the imposition of corrective action or the suspension or revocation of our CLIA certification or state licenses. If our CLIA certification or state licenses are suspended or revoked or our right to bill the Medicare and Medicaid programs or other third-party payers is suspended, we would no longer be able to sell our tests, which would adversely affect our business, financial condition and results of operations.

If we are able to successfully 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 willwould be adversely affected.

The testing, manufacturing and marketing of medical diagnostic tests entail an inherent risk of product liability claims. Potential product liability claims may exceed the amount of our insurance coverage or may be excluded from coverage under the terms of the policy. We will need to increase ourthe amount of our insurance coverage in the future if we are successful at introducing new diagnostic products, and this will increase our costs. If we are held liable for a claim or for damages exceeding the limit of our insurance coverage, we may be required to make substantial payments. This may have an adverse effect on our business, financial condition and results of operations.

If we fail to maintain compliance with the NasdaqOTC QX minimum listing requirements, our common stock will be subject to delisting.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 delisted.downgraded.

Our common stock is currently listed on The Nasdaq Capital Market. The continued listingtrading of our common stock on The NasdaqOTC CapitalQX Best Market is contingent on our continued compliance with a number of listing requirements. If we are unable to comply with the continued listing requirements of The NasdaqOTC CapitalQX Best Market, our common stock would be delisteddowngraded fromto Thethe NasdaqOTC CapitalQB Market, which would further limit investors’ ability to effect transactions in our common stock and subject us to additional trading restrictions. In order to maintain our listing,trading status, we must maintain certain share prices, financial and share distribution targets, including maintaining a minimum amount of stockholders’ equity and a minimum number of publicrevenue, stockholders,assets asor wellmarket as satisfying other listing requirements of The Nasdaq Capital Market. In addition to these objective standards, The Nasdaq Capital Market may delist the securities of any issuer for other reasons involving the judgment of The Nasdaq Capital Market.capitalization.

There is no assurance that we will be able to maintain compliance with The NasdaqOTC CapitalQX Best Market continued listingtrading standards and/or continue our listing on The Nasdaq Capital Market in the future.

In addition, pursuant to a stockholders agreement we entered into in connection with a May 2013 private placement,placement (the “2013 Stockholders Agreement”), one of our stockholders has the right to designate a director to be nominated by us to serve on our board of directors. Furthermore, this stockholderStockholders agreement Agreement gives two investors the right to participate in future equity offerings, on the same terms as other investors. In addition, the stockholders agreementStockholders Agreement prohibits us from taking certain material actions without the consent of at least one of the primary investors in the May 2013 private placement. These material actions include:

The foregoing rights terminate for a primary investor when that investor ceases to beneficially own less than 50% of the shares and warrants (taking into account shares issued upon exercise of the warrants), in the aggregate, that were purchased at the closing of the 2013 private placement. We believe that the rights of one of the primary investors have terminated. The interests of the parties to the stockholders agreement2013 Stockholders Agreement could conflict with or differ from our interests or the interests of other stockholders.

In connection with our private placement offering of common stock and warrants in May 2013 we entered into athe stockholders agreement (the “2013 Stockholders Agreement”) which, among other things, includes agreements limiting our ability to effect a change in control without the consent of at least one of the primary investors in that offering. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of us. The amendment of any of the provisions of either our certificate of incorporation or bylaws described in the preceding paragraph would require not only approval by our board of directors and the affirmative vote of at least 66 2/3% of our then outstanding voting securities, but also consent pursuant to the terms of the 2013 Stockholders Agreement. We are also subject to certain provisions of Delaware law that could delay, deter or prevent a change in control of the Company. These provisions could make a third-party acquisition of the Company difficult and limit the price that investors might be willing to pay in the future for shares of our common stock.

We plan to broaden our focus to the differential diagnosis of other gynecologic diseases that typically cannot be assessed through traditional non-invasive clinical procedures.procedures, expanding our addressable market to over 10 million women. We expect to continue commercializing our existing and new technology and to distribute our teststest through our decentralizedboth technologyin-house transferand servicedistributed platform, Aspira Synergy.pathways. We also intend to continue to raise public awareness regarding the diagnostic superiority of the Ova1Plus workflow as compared to CA-125 on its own for all women with adnexal masses, as well as the superior performance of machineour learning algorithmstests in detecting ovarian cancer in different racial and ethnic populations. We plan to continue to expand access to our tests among Medicaid patients as part of our corporate mission to make the best care available to all women, and we plan to advocate for legislation and the adoption of our technology in professional society guidelines to provide broad access to our products and services.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 1, Basis for Presentation and Summary of Significant Accounting and Reporting Policies, of the Notes to theour Consolidated Financial Statements included in this Annual Report on Form 10-K. The Consolidated Financial Statements are prepared in conformity with GAAP. Preparation of the financial statements requires us to make critical judgments, estimates, and assumptions that affect the amounts of assets and liabilities in the financial statements and revenues and expenses during the reporting periods (and related disclosures). We believe the policies discussed below are our critical accounting estimates, as they include the more significant, subjective, and complex judgments and estimates made when preparing our consolidated financial statements.

As discussed in Note 1 to theour consolidated financial statements, Basis for Presentation and Summary of Significant Accounting and Reporting Policies, we have incurred significant net losses and negative cash flows from operations since inception, and as a result have an accumulated deficit of approximately $531,397,000$544,177,000 at December 31, 2024.2025. We expect to incur a net loss in 20252026 as well. In order to continue our operations as currently planned through 20252026 and beyond, we will need to raise additional capital. Given the above conditions, there is substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from these uncertainties.

Refer toFor additional information, see Note 2 into our consolidated financial statementsstatements, Recent Accounting Pronouncements, contained in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Product Revenue. Product revenue was $9,182,000materially unchanged for the year ended December 31, 2024,2025, compared to $9,153,000 for the same period in 2023. 2024. Revenue for Aspira Labs is recognized when the Ova1, Overa, Ova1Plus or OvaWatch test result is successfully delivered and iscompleted based on estimates of what we expect to ultimately realize. The Company had a 7% reduction in unit sales, however maintained flat revenue through a focus on sales in more profitable regions of the country, resulting in a higher AUP (shown below).

Cost of Revenue – Product. The decrease in Cost of product revenue was $3,703,000 for the year ended December 31, 2024 compared to $3,892,000 for the same period in 2023, representing a decrease of $189,000, or 5%. The decrease was primarily due to a decrease in consultingphlebotomy expenses of $289,000 and personnel costs and labof supplies,$180,000, offset by an increase in shippingconsulting costs.costs of $107,000. We expect the cost of productrevenue to increase slightly in 20252026 as the number of tests performed continues to grow.increases.

Research and Development Expenses. Research and development expenses represent costs incurred to develop our technology and carry out clinical studies, and include personnel-related expenses, regulatory costs, reagents and supplies used in research and development laboratory work, infrastructure expenses, contract services and other outside costs. The decrease in Research and development expenses for the year ended December 31, 2024 decreased by $769,000, or 19%, compared to the same period in 2023. This decrease was primarily due to a decreasereduction in employment-related consulting costs of $620,000, personnel expenses of approximately $789,000$200,000 and alab decreasesupply in clinical trialscosts of $227,000,$104,000, offset by an increase to our labclinical suppliestrials of $132,000, as well as a one-time credit in 2023 related to collaborations of $200,000.$600,000. We expect research and development expenses to decreaseincrease further in 20252026 due to recentthe personnelfocus changes.on our pipeline.

Sales and Marketing Expenses. Our sales and marketing expenses consist primarily of personnel-related expenses, education and promotional expenses. These expenses include the costs of educating physicians and other healthcare professionals, medical meeting participation, and dissemination of scientific and health economic publications. The decrease in Sales and marketing expenses for the year ended December 31, 2024 increased by $334,000, or 4%, compared to the same period in 2023. This increase was primarily due to a decrease in personnel costs of $2,944,000, costs related to our contracted sales team of $740,000, increased personnel costs of $175,000 and$972,000, travel expenses of $141,000,$738,000 offset by decreased consulting costs of $953,000, a decrease inand other marketing costs of $230,000 and decreased subscription costs of $193,000.$297,000. We expect sales and marketing expenses to decreaseremain inflat 2025for duethe tomajority recentof personnel changes.2026.

General and Administrative Expenses. General and administrative expenses consist primarily of personnel-related expenses, professional fees, including legal, finance and accounting expenses and other infrastructure expenses. The decrease in General and administrative expenses for the year ended December 31, 2024 decreased by $1,922,000, or 16%, compared to the same period in 2023. This decrease was primarily due to a decrease in employment-related expenses of $422,000, a decrease in consultingpersonnel costs of $519,000,$2,723,000 a decrease inand outside legal costs of $247,000,$364,000, decreasedoffset by increased consulting expenses of $430,000 and accounting costs of $204,000 and a decrease in public company expenses of $174,000.$389,000. We expect general and administrative expenses to decreaseremain furtherflat induring 2025 due to recent personnel changes.2026.

Net cash used in operating activities was $15,894,000 for the year ended December 31, 2023,2025 resultingresulted primarily from the net loss reported of $16,690,000, the forgiveness of our$12,780,000, DECDapproximately loan$1,148,000 ofrelated $1,000,000to changes in accrued liabilities and $936,000 related to changes in accounts payable, primarily offset by $5,607,000 related to changes in fair value of warrant liabilitiesliabilities, $1,198,000 related to changes in thefair amount value of approximatelyconvertible $629,000,notes, primarily offset by $1,724,000$531,000 related to non-cash stock compensation expense and $577,000$412,000 related to changes infinancing prepaidexpense expensesfor andentering otherinto assets.an equity line of credit with Lincoln Park.

Net cash provided by financing activities was $5,216,000 for the year ended December 31, 2023,2025 related primarily to anet registeredproceeds directfrom an at the market offering resulting in net proceeds of $4,119,000,$3,337,000, after deducting placement agent costs and other expenses of $597,000,$147,000, net proceeds of $68,000$2,809,000 related to ana atprivate the marketplacement offering, after deductingdeducing transaction-related offering costs of $134,000,$140,000, net proceeds of $1,366,000 related to convertible notes and anproceeds equityfrom linea warrant exercise of credit offering of $1,177,000,$112,000, partially offset by principal payments on the DECD loan of $148,000.$233,000.

These limitations may result in the expiration of a portion of our NOL carryforwards before utilization. Due to the existence of a full valuation allowance against our remaining NOLs, it is not expected that Section 382 limitations will have an impact on our results of operations or financial position. For additional information, see Note 11 to our consolidated financial statements, Income Taxes.

We plan to continue to expend resources selling and marketing orour ovarian cancer and endometriosis offerings and developing additionalour diagnostic testspipeline and service capabilities.

Under the terms of the DECD Loan Agreement, we were eligible for forgiveness of up to $1,500,000 of the principal amount of the loan had we achieved certain job creation and retention milestones by December 31, 2022. On June 26, 2023, we were notified by the DECD thatif we had satisfied all job creation and retention requirements under the loan agreement to receive forgiveness of $1,000,000. If we failfailed to maintain our Connecticut operations through March 22, 2026, the DECD may requirehave required early repayment of a portion or all of the loan plus a penalty of 5% of the total funded loan. For additional information, see Note 67 ofto our consolidated financial statements.statements, Commitments, Contingencies and Debt. If we choose to repay the loan early, it may be done at any time without premium or penalty. As of December 31, 2024, 2025, the remaining balance outstanding under the DECD Loan Agreement is approximately $1,511,000,$1,277,000, net of issuance costs.

In August 2022, we entered into a sponsored research agreement with Harvard’s Dana-Farber Cancer Institute, Brigham & Women’s Hospital, and Medical University of Lodz (the “Dana-Farber, Brigham, Lodz Research Agreement”) for the generation of a multi-omic, non-invasive diagnostic aid to identify endometriosis based on circulating miRNAs and proteins. The results“Dana-Farber, ofBrigham, thisLodz collaborationResearch will be advanced, co-developed technology to guide medical and clinical management of women presenting with symptoms of endometriosis. This collaboration is expected to accelerate the development and commercialization of future endometriosis products, such as ENDOinform. The contractAgreement” requires payments to be made upon the achievement of certain milestones. Under the terms of and as further described in the agreement, payments of approximately $1,252,000 arewere duemade from by us to the counterparties upon successful completion of certain deliverables.deliverables as follows: 68% was paid in 2022, 15% was paid in 2023 and the remaining 17% was paid in 2025. During the year ended December 31, 2024,2025, approximately $118,000 $50,000 has been recorded as research and development expense in our consolidated financial statement of operations for the project. During the year ended December 31, 2023,2024, approximately $215,000,$118,000, was recorded as research and development expense in our consolidated financial statement of operations for the project. From the inception of the Dana-Faber, Brigham, Lodz Research Agreement through December 31, 2024, 2025, research and development expenses in the cumulative amount of $1,202,000$1,252,000 have been recorded.recorded Fromand the inception of the Dana-Faber, Brigham, Lodz Research Agreement through December 31, 2024, we made payments totaling $1,040,000. Additional payments of $212,000 are due to the collaboration partners in 2025 upon completion of certain deliverables estimated to occur during 2025.paid.

On March 20, 2023, we entered into a licensing agreement with Harvard’s Dana-Farber Cancer Institute, Brigham & Women’s Hospital, and Medical University of Lodz (the “Ovarian Cancer License Agreement”) under which the Company will license certain of its intellectual property to be used in our OvaSuite product portfolio. Under the terms of the Ovarian Cancer License Agreement, we paid an initial license fee of $75,000 and then will pay aan annual license maintenance fee of $50,000 on each anniversary of the date, as well as non-refundable royalty payments of up to $1,350,000 based on certain regulatory approvals and commercialization milestones and further royalty payments based on the net sales of our products included. No milestones have been reached as of December 31, 2024,2025, and no royalty payments have been paid to date.

Our Ova1 test received FDA de novo classification in September 2009. Ova1 comprises instruments, assays, reagents, and the OvaCalc software, which includes a proprietary algorithm that produces a risk score. Our Overa test, which includes an updated version of OvaCalc, received FDA 510(k) clearance in March 2016. Ova1, Overa and OvaWatch each use the Roche Cobas 4000, 6000 and 8000 platforms for analysis of proteins. Revenue from Ova1 and OvaWatch is included in the results of operations in total revenue for the three and six months ended MarchJune 31,30, 2026.

Our product revenue is generated by performing diagnostic services using our OvaSuite tests, and the service is completed upon the delivery of the test result to the prescribing physician. The entire transaction price is allocated to the single performance obligation contained in a contract with a patient. Under ASC Topic 606, Revenue from Contracts with Customers, all revenue is recognized upon completion of the OvaSuite test and delivery of test 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, we consider factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and us, and any developments or changes that could impact reimbursement. These estimates require significant judgment by management. For OvaSuite tests, we also review our patient account population and determine an appropriate distribution of patient accounts by payer (i.e., Medicare, patient pay, other third-party payer, etc.) into portfolios with similar collection experience. When evaluated for collectability, this results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis.

Results of Operations – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The selected summary financial and operating data of the Company for the three months ended MarchJune 31,30, 2026 and 2025 were as follows.

Product Revenue. Revenue for Aspira Labs is recognized when the Ova1, Overa, Ova1Plus or OvaWatch test is completed based on estimates of what we expect to ultimately realize. The 14% product15% revenue decrease is primarily due to a decrease in OvaSuite test volume compared to the prior year.

The number of OvaSuite tests performed decreased 14%12% to 4,8965,059 during the three months ended MarchJune 31,30, 2026, compared to 5,679 product5,728 tests for the same period in 2025. This decrease is a result of our reduced field sales headcount. We expect revenue to increase in the secondthird quarter due to our focus on higher revenue generating payers.

The volume and AUP for the three months ended MarchJune 31,30, 2026 and 2025 were as follows.

Cost of Revenue – Product.Revenue. The increase in Cost of product revenue was primarily due to an increase in phlebotomy expenses of $296,000 and personnelconsulting costs of $33,000,$53,000, postage costs of $24,000 and software licenses of $21,000, partially offset by a decrease in consultinglab costssupplies of $103,000,$33,000, and postage costsroyalties of $61,000.$11,000. We expect the cost of revenue to increase slightly in 2026 as the number of tests performed increases.

Gross Profit Margin. Gross profit margin for product revenue decreased from 68.5%63.8% to 54.4%55.3% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025.

Research and Development Expenses. Research and development expenses represent costs incurred to develop our technology and carry out clinical studies, and include personnel-related expenses, regulatory costs, reagents and supplies used in research and development laboratory work, infrastructure expenses, contract services and other outside costs. The increasedecrease in research and development expenses for the three months ended MarchJune 31,30, 2026 when compared to the same period in 2025 was primarily due to a increasedecrease in clinical trial costs of $295,000 and personnel costs of $52,000,$58,000, partially offset by aan decreaseincrease in consulting costs of $34,000 and lab supplies of $31,000.$32,000. We expect research and development expenses to increase modestly over the secondthird quarter of 2026, as a result of our focus on the product pipeline.

Sales and Marketing Expenses. Our sales and marketing expenses consist primarily of personnel-related expenses, education and promotional expenses. These expenses include the costs of educating physicians and other healthcare professionals regarding our products. Sales and marketing expenses also include the costs of sponsoring continuing medical education, medical meeting participation, and dissemination of scientific and health economic publications. Sales and marketing expenses decreased for the three months ended MarchJune 31,30, 2026 when compared to the same period in 2025, primarily due to decreased personnel costs of $425,000,$61,000, costs related to our contracted sales team of $48,000,$40,000, and consulting costs of $41,000.$28,000, partially offset by an increase in software costs of $13,000. We expect sales and marketing expenses to remaindecrease flatslightly during the secondthird quarter of 2026.

General and Administrative Expenses. General and administrative expenses consist primarily of personnel-related expenses, professional fees and other costs, including legal, finance and accounting expenses and other infrastructure expenses. General and administrative expenses decreased for the three months ended MarchJune 31,30, 2026 when compared to the same period in 2025. This decrease was primarily due to a decrease in personnelconsulting costs of $292,000,$415,000, legalboard fees of $267,000,$60,000, temporary help costs of $53,000, audit and tax costs of $257,000,$44,000, partially offset by public company costs of $195,000$114,000 and boardlegal fees of $90,000.$242,000. We expect general and administrative expenses to increaseremain modestlyflat during the secondthird quarter of 2026, due to our annual shareholders’ meeting.2026.

Change in fair value of Warrant Liabilities. For each of the three months ended MarchJune 31,30, 2026 and 2025, aan declineincrease in our stock price during the quarter resulted in a gainloss recognized in the Change in fair value of Warrant Liabilities.

We have incurred significant net losses and negative cash flows from operations since inception, and as a result have an accumulated deficit of approximately $543,501,000$545,921,000 as of MarchJune 31,30, 2026. We also expect to incur a net loss and negative cash flows from operations for the remainder of 2026. Working capital levels may not be sufficient to fund operations as currently planned through the next twelve months, absent a significant increase in revenue over historic revenue or additional financing. Given the above conditions, there is substantial doubt about our ability to continue as a going concern within one year after the date these consolidated interim financial statements are issued.

Under the terms of the DECD Loan Agreement, we were eligible for forgiveness of $1,500,000 of the principal amount of the loan after achieving certain job creation and retention milestones. If we fail to maintain our 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. For additional information, see Note 5 to our unaudited condensed consolidated financial statements Commitments, Contingencies and Debt. If we choose to repay the loan early, it may be done at any time without premium or penalty. As of MarchJune 31,30, 2026, the remaining balance outstanding under the DECD Loan Agreement is $1,218,000.$1,160,000.

As of MarchJune 31,30, 2026, we have sold 20,000 shares under the Lincoln Park Agreement and the value of the remaining availability under the Lincoln Park Agreement as of MarchJune 31,30, 2026 was $9,994,080.

The term loan is evidenced by a Subordinated Secured Promissory Note (the “Promissory Note”), which was issued in the principal amount of $1,050,000, includes an interest rate of 42%, and is scheduled to mature on August 26, 2026. The Promissory Note is expressly subordinated in right of payment to all Senior Indebtedness, as described in the Promissory Note. The Promissory Note is secured by a pledge on all assets. The collateral agent is authorized to take actions to perfect the security interests; however, the Subordinated Loan Agreement provides that a financing statement may be filed only upon an event of default. As of MarchJune 31,30, 2026, the remaining balance outstanding under the Promissory Note iswas $775,000.$344,000.

As mentioned, we have incurred significant net losses and negative cash flows from operations since inception, and we expect to continue to incur a net loss and negative cash flows from operations in 2026. At MarchJune 31,30, 2026 we had an accumulated deficit of $543,501,000$545,921,000 and stockholders’ deficit of $6,207,000.$7,256,000. As of MarchJune 31,30, 2026, we had $1,344,000$477,000 in cash and cash equivalents, $5,595,000$5,338,000 in current liabilities, and a working capital deficit of $1,810,000.$2,542,000. There can be no assurance that we will achieve or sustain profitability or positive cash flow from operations. While we expect to grow revenue through Aspira Labs, there is no assurance of our ability to generate substantial revenues and cash flows from Aspira Labs’ operations. We expect revenue from our products to be our only material, recurring source of cash for the remainder of 2026.

Net cash used in operating activities was $359,000$2,370,000 for the threesix months ended MarchJune 31,30, 2026, resulting primarily from changes in the fair value of warrant liabilities of $3,110,000$2,625,000, net loss of $1,744,000 and changes in accounts receivable of $217,000,$278,000, offset by changes in other liabilities of $1,380,000, changes in accounts payable of $731,000,$1,516,000, netchanges incomein accrued liabilities of $676,000$287,000 and changes in prepaid assets of $120,000.$242,000.

Net cash used in operating activities was $3,102,000$4,836,000 for the threesix months ended MarchJune 31,30, 2025, resulting primarily from the net loss reported of $1,853,000,$4,519,000, which includes the loss upon issuance of convertible notes carried at fair value of $1,198,000, changes in prepaid assets of $297,000$426,000, non-cash lease expense of $122,000 and $103,000$119,000 in stock based compensation expense, offset by changes in accrued liabilities of $616,000, changes in other liabilities of $459,000, changes in accounts payable of $430,000, changes in the fair value of warrant liabilities of $921,000, changes in accrued liabilities of $792,000,$297,000, changes in accounts payablereceivable of $722,000,$288,000 changesand in other liabilities of $229,000,a change in the fair value of Convertible Notes carried at fair value and changes in accounts receivable of $110,000.$170,000.

Net cash used in investing activities was $0$150,000 and none for each of the threesix months ended MarchJune 31,30, 2026 and 2025.2025, respectively.

Net cash provided by financing activities was $4,645,000$1,241,000 for the threesix months ended MarchJune 31,30, 2025,2026, stemming primarily from the$1,352,000 atin proceeds from the market2026 offeringPrivate resultingPlacement inOffering, net proceeds of $3,337,000issuance and from convertible notes resulting in gross proceeds of $1,366,000,costs, partially offset by principal payments on the DECD loan.