Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑☒

As of ~~May 12, 2021,~~February 7, 2022, the number of shares of the registrant’s common stock outstanding was: ~~49,487,492.~~49,569,113.

	March 31, 2021			June 30, 2020			December 31, 2021			June 30, 2021
	(Unaudited)			(Note)			(Unaudited)			(Note)
Assets
Current assets
Cash and cash equivalents	$	31,474		$	3,349		$	30,170		$	35,936
Restricted cash		542			—
Short-term investments								27,106			27,351
Accounts receivable		112			101			92			5
Inventory:
Inventory, net:
Raw materials		847			416			1,135			1,056
Work-in-process		100			38			2			147
Finished goods		201			222			277			297
Income tax receivable		—			429
Prepaid expenses and other current assets		396			117			516			318
Total current assets		33,672			4,672			59,298			65,110
Property and equipment, net		82			99			870			263
Assets held for disposal		—			237
Operating leases, right-of-use assets, net		26			851			206			249
Other assets		—			71			11			11
Total assets	$	33,780		$	5,930		$	60,385		$	65,633
Liabilities and stockholders’ equity
Current liabilities
Accounts payable		370			239			90			396
Payroll related accruals		1,179			433			741			344
Accrued expenses and other liabilities		787			627			853			888
Income tax payable		2			2			2			2
Term note payable - related party		2,500			2,500			500			2,500
Term note payable		512			210
Lease liabilities		32			339
Lease liabilities, current								227			81
Total current liabilities		5,382			4,350			2,413			4,211
Term note payable, net of current portion		30			332
Lease liabilities, net of current portion		40			623			421			215
Total liabilities		5,452			5,305			2,834			4,426
Commitments and contingencies (Note 12)
Commitments and contingencies (Note 13)
Stockholders’ equity
Convertible preferred stock, $0.001 par value, 2,500,000 shares authorized; 280,898 shares of Series D issued and outstanding at March 31, 2021 and June 30, 2020		—			—
Common stock, $0.001 par value, 50,000,000 shares authorized; 25,013,254 and 8,250,286 shares issued at March 31, 2021 and June 30, 2020, respectively; 24,613,338 and 7,850,362 shares outstanding at March 31, 2021 and June 30, 2020, respectively		190,616			190,599
Treasury stock, 399,916 shares at cost at March 31, 2021 and June 30, 2020		(4,129	)		(4,129	)
Convertible preferred stock, $0.001 par value, 2,500,000 shares authorized; 280,898 shares of Series D issued and outstanding at December 31, 2021 and June 30, 2021								—			—
Common stock, $0.001 par value, 250,000,000 and 50,000,000 shares authorized at December 31, 2021 and June 30, 2021, respectively; 49,514,467 and 49,450,558 shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively								190,641			190,641
Additional paid-in capital		47,756			13,934			78,769			77,971
Accumulated deficit		(205,915	)		(199,779	)		(211,591	)		(207,382	)
Accumulated other comprehensive loss								(268	)		(23	)
Total stockholders’ equity		28,328			625			57,551			61,207
Total liabilities and stockholders’ equity	$	33,780		$	5,930		$	60,385		$	65,633

Note: The balance sheet at June 30, ~~2020,~~2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by the United States generally accepted accounting principles for complete financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended December 31,						Six Months Ended December 31,
	2021			2020			2021			2020			2021			2020			2021			2020
Revenue	$	54		$	118		$	324		$	324		$	561		$	130		$	748		$	270
Cost of revenue		46			111			287			307			441			128			616			241
Gross profit		8			7			37			17			120			2			132			29
Operating expenses:
Selling, general and administrative		1,679			1,193			3,408			3,505			1,728			803			3,154			1,729
Research and development		669			814			2,036			2,608			652			758			1,291			1,367
Disposal of corporate lease		—			—			544			—			—			—			—			544
Total operating expenses		2,348			2,007			5,988			6,113			2,380			1,561			4,445			3,640
Loss from operations		(2,340	)		(2,000	)		(5,951	)		(6,096	)		(2,260	)		(1,559	)		(4,313	)		(3,611	)
Interest and other expense, net		(63	)		(68	)		(185	)		(123	)
Other income and (expense), net														80			(63	)		104			(122	)
Loss from operations before income taxes		(2,403	)		(2,068	)		(6,136	)		(6,219	)		(2,180	)		(1,622	)		(4,209	)		(3,733	)
Income tax provision		—			—			—			—
Income tax benefit														0			0			0			0
Net loss	$	(2,403	)	$	(2,068	)	$	(6,136	)	$	(6,219	)	$	(2,180	)	$	(1,622	)	$	(4,209	)	$	(3,733	)
Weighted average common shares outstanding:
Basic and diluted		18,171			6,107			14,649			5,934			47,482			15,864			47,455			11,769
Basic and diluted net loss per common share:
Net loss	$	(0.13	)	$	(0.34	)	$	(0.42	)	$	(1.05	)	$	(0.05	)	$	(0.10	)	$	(0.09	)	$	(0.32	)
Other comprehensive loss, net of tax:
Net loss													$	(2,180	)	$	(1,622	)	$	(4,209	)	$	(3,733	)
Available-for-sale securities:
Net unrealized loss														(197	)		—			(245	)		—
Total comprehensive loss													$	(2,377	)	$	(1,622	)	$	(4,454	)	$	(3,733	)

See accompanying notes to unaudited condensed consolidated financial statements.

Preferred Stock

Series D

Common Stock

Number of
Shares
Outstanding

Amount

Number of
Shares
Outstanding

Amount

Treasury
Stock
Amount

Additional
Paid-In
Capital

Accumulated
Deficit

Total
Stockholders’
Equity

Balance at June 30, 2020

281

$
—

7,850

$
190,599

$
(4,129
)

$
13,934

$
(199,779
)

$
625

Stock offering costs

—

—

—

—

—

(2
)

—

(2
)
Stock-based compensation

—

—

—

—

—

49

—

49

Cancellation of restricted stock

—

—

(6
)

—

—

(5
)

—

(5
)
Net loss

—

—

—

—

—

—

(2,111
)

(2,111
)
Balance at September 30, 2020

281

$
—

7,844

$
190,599

$
(4,129
)

$
13,976

$
(201,890
)

$
(1,444
)
Issuance of stock, net of offering costs

—

—

10,714

11

—

21,819

—

21,830

Stock-based compensation

—

—

—

—

—

47

—

47

Cancellation of restricted stock

—

—

(17
)

—

—

(1
)

—

(1
)
Net loss

—

—

—

—

—

—

(1,622
)

(1,622
)
Balance at December 31, 2020

281

$
—

18,541

$
190,610

$
(4,129
)

$
35,841

$
(203,512
)

$
18,810

Issuance of stock, net of offering costs

—

—

3,985

4

—

11,723

—

11,727

Stock-based compensation

—

—

2,087

2

—

192

—

194

Net loss

—

—

—

—

—

—

(2,403
)

(2,403
)
Balance at March 31, 2021

281

$
—

24,613

$
190,616

$
(4,129
)

$
47,756

$
(205,915
)

$
28,328

	Preferred Stock
	Series D				Common Stock
	Number of Shares Outstanding		Amount		Number of Shares Outstanding		Amount		Treasury Stock Amount		Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balance at June 30, 2021		281	$	—		49,451	$	190,641	$	—	$	77,971	$	(207,382	)	$	(23	)	$	61,207
Net change in available-for-sale marketable securities		—		—		—		—		—		—		—			(48	)		(48	)
Stock-based compensation		—		—		—		—		—		359		—			—			359
Net loss		—		—		—		—		—		—		(2,029	)		—			(2,029	)
Balance at September 30, 2021		281	$	—		49,451	$	190,641	$	—	$	78,330	$	(209,411	)	$	(71	)	$	59,489
Net change in available-for-sale marketable securities		—		—		—		—		—		—		—			(197	)		(197	)
Stock-based compensation		—		—		63		—		—		439		—			—			439
Net loss		—		—		—		—		—		—		(2,180	)		—			(2,180	)
Balance at December 31, 2021		281	$	—		49,514	$	190,641	$	—	$	78,769	$	(211,591	)	$	(268	)	$	57,551

	Preferred Stock																									Preferred Stock
	Series C				Series D				Common Stock																	Series D				Common Stock
	Number of Shares Outstanding		Amount		Number of Shares Outstanding		Amount		Number of Shares Outstanding			Amount		Treasury Stock Amount			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity			Number of Shares Outstanding		Amount		Number of Shares Outstanding			Amount		Treasury Stock Amount			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at June 30, 2019		281	$	—		281	$	—		5,775		$	190,571	$	(4,129	)	$	7,964		$	(191,698	)	$	2,708
Adjustment to opening retained earnings related to adoption of ASC Topic 842		—		—		—		—		—			—		—			—			230			230
Balance at June 30, 2020																											281	$	—		7,850		$	190,599	$	(4,129	)	$	13,934		$	(199,779	)	$	—	$	625
Stock offering costs																											—		—		—			—		—			(2	)		—			—		(2	)
Stock-based compensation																											—		—		—			—		—			49			—			—		49
Restricted stock cancellation																											—		—		(6	)		—		—			(5	)		—			—		(5	)
Net loss																											—		—		—			—		—			—			(2,111	)		—		(2,111	)
Balance at September 30, 2020																											281	$	—		7,844		$	190,599	$	(4,129	)	$	13,976		$	(201,890	)	$	—	$	(1,444	)
Issuance of stock, net of offering costs		—		—				—		146			—		—			321			—			321			—		—		10,714			11		—			21,819			—			—		21,830
Stock-based compensation		—		—		—		—		—			—		—			78			—			78			—		—		—			—		—			47			—			—		47
Restricted stock issuance		—		—		—		—		5			26		—			—			—			26
Restricted stock cancellation																											—		—		(17	)		—		—			(1	)		—			—		(1	)
Net loss		—		—		—		—		—			—		—			—			(2,068	)		(2,068	)		—		—		—			—		—			—			(1,622	)		—		(1,622	)
Balance at September 30, 2019		281	$	—		281	$	—		5,926		$	190,597	$	(4,129	)	$	8,363		$	(193,536	)	$	1,295
Issuance of stock, net of offering costs		—		—		—		—		433			1		—			951			—			952
Stock-based compensation		—		—		—		—		—			—		—			97			—			97
Cancellation of restricted stock		—		—		—		—		(11	)		—		—			(11	)		—			(11	)
Forfeiture of stock-based compensation		—		—		—		—		—			—		—			(3	)		—			(3	)
Net loss		—		—		—		—		—			—		—			—			(2,083	)		(2,083	)
Balance at December 31, 2019		281	$	—		281	$	—		6,348		$	190,598	$	(4,129	)	$	9,397		$	(195,619	)	$	247
Issuance of stock, net of offering costs		—		—		—		—		1,227			1		—			4,376		.				4,377
Stock-based compensation		—		—		—		—		—			—		—			95			—			95
Net loss		—		—		—		—		—			—		—			—			(2,068	)		(2,068	)
Balance at March 31, 2020		281	$	—		281	$	—		7,575		$	190,599	$	(4,129	)	$	13,868		$	(197,687	)	$	2,651
Balance at December 31, 2020																											281	$	—		18,541		$	190,610	$	(4,129	)	$	35,841		$	(203,512	)	$	—	$	18,810

See accompanying notes to unaudited condensed consolidated financial statements.

	Nine Months Ended March 31,						Six Months Ended December 31,
	2021			2020			2021			2020
Cash flows from operating activities:
Net loss	$	(6,136	)	$	(6,219	)	$	(4,209	)	$	(3,733	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation, net of forfeitures		284			282			798			90
Depreciation and amortization		197			327			94			141
Loss on disposal of assets		173			—			0			173
Changes in assets and liabilities:
Accounts receivable		(11	)		(82	)		(87	)		6
Inventory		(472	)		(262	)
Inventory, net								86			88
Income tax receivable		429			—			0			429
Accounts payable		131			28			(306	)		(11	)
Other assets and liabilities		541			970			140			325
Net cash used in operating activities		(4,864	)		(4,956	)		(3,484	)		(2,492	)
Cash flows from investing activities:
Purchases of property and equipment		(24	)		—			(264	)		(16	)
Net cash used in investing activities		(24	)		—			(264	)		(16	)
Cash flows from financing activities:
Proceeds from term note payable - related party		—			2,500
Repayment of related party debt								(2,000	)		0
Payments on lease financing								(18	)		(6	)
Proceeds from issuance of stock, net of offering issuance costs		33,555			5,650			0			21,828
Net cash provided by financing activities		33,555			8,150

Net cash (used in) provided by financing activities								(2,018	)		21,822
Net change in cash and cash equivalents	$	28,667			3,194			(5,766	)		19,314
Cash and cash equivalents at beginning of period		3,349			1,588			35,936			3,349
Cash and cash equivalents at end of period	$	32,016		$	4,782		$	30,170		$	22,663

Reconciliation of cash and cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$	31,474		$	4,660		$	30,170		$	22,121
Restricted cash	$	542		$	122			0			542
Total	$	32,016		$	4,782		$	30,170		$	22,663

Supplemental disclosures of cash flow information:
Cash paid for interest	$	—		$	—		$	3		$	0
Income taxes paid	$	—		$	—		$	0		$	0
Impact to retained earnings from adoption of ASC Topic 842	$	—		$	230
Operating right-of-use assets and associated liabilities	$	—		$	1,608
Acquisition of equipment through financing lease							$	394		$	—

See accompanying notes to unaudited condensed consolidated financial statements.

Description of the Company – Astrotech Corporation (Nasdaq: ASTC) (“Astrotech,” ~~“the Company,~~the “Company,” “we,” “us,” or “our”), a Delaware corporation organized in 1984, is a ~~science and technology development and commercialization~~mass spectrometry company that launches, manages, and ~~builds~~commercializes scalable companies based on its innovative ~~technology in order to maximize shareholder value.~~core technology.

Basis of Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the ~~nine~~three and six months ended ~~March~~December 31, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, ~~2021.~~2022. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2020.~~2021. Certain prior year amounts have been reclassified to conform to the current year presentation.

Accounting Pronouncements – In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, “Government Assistance (Topic 832)” (“ASU 2021-10”), which enhances disclosure of transactions with governments that are accounted for by applying a grant or contribution model. The new pronouncement requires entities to provide information about the nature of the transaction, terms and conditions associated with the transaction, and financial statement line items affected by the transaction. ASU 2021-10 is effective for fiscal years beginning after December 15, 2021. The Company does not expect the adoption of ASU 2021-10 to have a material impact on its financial statements.

Astrotech Technologies, Inc. (“ATI”) owns and licenses the Astrotech Mass Spectrometer Technology™ (the “AMS Technology”), the platform mass spectrometry technology originally developed by 1^st Detect Corporation (“1^st Detect”). The AMS Technology has been designed to be inexpensive, small, and easy to use. Unlike other technologies, the AMS Technology works under ultra-high vacuum, which eliminates competing molecules, yielding higher resolution and fewer false alarms. The intellectual property includes 2824 patents granted with ~~two~~2 additional patents in process along with extensive trade secrets. With a number of diverse market opportunities for the core technology, ATI is structured to license the intellectual property for different fields of use. ATI currently licenses the AMS Technology to ~~three~~3 wholly-owned subsidiaries of Astrotech on an exclusive basis, including to 1^st Detect for use in the security and detection market, to AgLAB Inc. (“AgLAB”) for use in the agriculture market, and to BreathTech Corporation (“BreathTech”) for use in breath analysis.

~~On March 24, 2021, ATI signed a Letter of Agreement (the “LOA”) effective as of March 24, 2021 by and among ATI and Sanmina Corporation (“Sanmina”).~~

~~Under the LOA, Sanmina will procure and inspect components, parts, and raw materials and manufacture, assemble, test, inspect, configure, store, and ship the products for any of the licensees of ATI.~~

1^st Detect, a licensee of ATI for the security and detection market, has developed the TRACER 1000™, the world’s first mass ~~spectrometer~~spectrometry (“MS”) based explosives trace detector (“ETD”) certified by the European Civil Aviation Conference (“ECAC”), designed to replace the ETDs used at airports, cargo ~~facilities,~~and other secured facilities, and borders worldwide. The Company believes that ETD customers are unsatisfied with the currently deployed ETD technology, which is driven by ion mobility spectrometry (“IMS”). The Company believes that IMS-based ETDs are fraught with false positives, as they often misidentify personal care products and other common household chemicals as explosives, causing facility shutdowns, unnecessary delays, frustration, and significant wasted security resources. In addition, there are hundreds of different types of explosives, but IMS-based ETDs have a very limited threat detection library reserved only for those several explosives of largest concern. Adding additional compounds to the detection library of an IMS-based ETD fundamentally reduces the instrument’s performance, further increasing the likelihood of false alarms. In contrast, adding additional compounds to the TRACER 1000’s detection library does not degrade ~~the TRACER 1000’s~~its detection capabilities, as it has a virtually unlimited and easily expandable threat library.

In order to sell the TRACER 1000 to airport and cargo security customers in the European Union and certain other countries, ECAC certification is required. ~~Certain other countries also accept ECAC certification. After receiving ECAC certification for~~We are currently selling the TRACER 1000 ~~on February 21, 2019, the Company is now marketing~~ to ~~and taking orders from airports and cargo facilities outside of the U.S. that~~customers who accept ECAC certification.

On June 26, 2019, the Company announced the official launch of the TRACER 1000, and on November 22, 2019, also announced the first commercial sale of TRACER 1000 units to a global shipping and logistics company.

In the United States, the Company is working with the U.S. Transportation Security Administration (“TSA”) towards ~~Air Cargo~~air cargo certification. On March 27, 2018, the Company announced that the TRACER 1000 was accepted into TSA’s Air Cargo Screening Technology Qualification Test (“ACSQT”) and, on April 4, 2018, the Company announced that the TRACER 1000 was beginning testing with TSA for passenger screening at airports. On November 14, 2019, the Company announced that the TRACER 1000 had been selected by the TSA’s Innovation Task Force to conduct live checkpoint screening at Miami International Airport. With similar protocols as ECAC testing, the Company has received valuable feedback from all programs. Following ECAC certification and the Company's early traction within the cargo market, testing for cargo security continued with the TSA. With the COVID-19 pandemic, all testing within the TSA was put on hold; however, the Company resumed cargo ~~non-detection~~

testing ~~resumed~~ during the summer of 2020, and the Company subsequently announced on September 9, 2020 that the TRACER 1000

passed the non-detection testing portion of the TSA’s ACSQT. Due to continued delays caused by COVID-19, TSA cargo detection testing ~~resumed during~~is ongoing but proceeding much more slowly than anticipated. As a result, efforts are primarily focused on the ~~fall of 2020 and continues to move forward. This~~Company’s other opportunities. TSA cargo detection testing is the ~~next and~~ final step to be listed on the Air Cargo Screening Technology List (“ACSTL”) as an “approved” ~~device and, if~~device. If approved, ~~thereby~~the TRACER 1000 will be approved for cargo sales in the United States. ~~Given the deterioration in air traffic caused by the pandemic, TSA certification testing for passenger checkpoint security was put on indefinite hold.~~

~~Finally, on October 28, 2020, the Company~~On August 25, 2021, 1^st Detect announced that it ~~had surpassed $1.0 million in~~secured an important landmark purchase ~~orders~~order for the TRACER 1000, ~~and~~representing the first units to be deployed at an ~~additional $1.0 million in future service and support commitments, also announcing DHL (Deutsche Post AG) as its largest flagship customer.~~airport security checkpoint. These systems were delivered to the customer during the second quarter of fiscal year 2022.

AgLAB, ~~is a~~an exclusive licensee of ATI ~~and~~for the agriculture market, has developed the AgLAB-1000™ series of mass spectrometers for use in the ~~agriculture industry for both process control~~hemp and cannabis market with initial focus on optimizing yields in the ~~detection of trace amounts of solvents~~extraction and ~~pesticides.~~distillation process. The AgLAB product line is a derivative of the Company’s core AMS Technology. The AMS Technology provides a significant competitive advantage due to its small size, rugged design, quick analysis, and ease of use.

BreathTech, an exclusive licensee of ATI for use in breath analysis, is developing the BreathTest-1000™, a breath analysis tool to screen for volatile organic compound (“VOC”) metabolites found in a person’s breath that could indicate they may have an infection, including COVID-19 or pneumonia. While vaccines have been deployed to prevent the transmission of COVID-19, only a fraction of the world has been vaccinated and new variants continue to pose a significant and evolving threat. New tools to aid in the battle against COVID-19 remain of the utmost importance to help defeat the disease, and BreathTech, in conjunction with Cleveland Clinic, are developing a quick and easy to use device to help aid in preventing the further spread of the disease.

Development of the BreathTest-1000 follows the Company’s results in pre-clinical trials for the BreathDetect-1000™, a rapid self-serve breathalyzer that iswas designed to detect bacterial infections in the respiratory tract, including pneumonia. The pre-clinical trials were conducted in collaboration with UT Health San Antonio in 2017.

The following tables summarize gains and losses related to the Company’s investments as of December 31, 2021 and June 30, 2021:

On ~~October 20,~~April 27, 2021, Astrotech entered into a new lease for a research and development facility of approximately 5,960 square feet in Austin, Texas that includes a laboratory, a small production shop, and offices for staff, although many of the Company’s employees continue to work remotely. The lease commenced on June 1, 2021 and has a lease term of 36 months.

On August 3, 2020, the Company ~~announced~~ a joint development agreement with the Cleveland Clinic Foundation (the “Cleveland Clinic”) to explore leveraging the BreathTest-1000 to rapidly screen for COVID-19 or related indicators. The goal of the agreement is to develop a non-invasive device that will use breath samples to identify COVID-19 strains, with the potential to provide a low-cost, self-service screening option that could be deployed on a large-scale.

On March 31, 2021, BreathTech signed an Investigator-Initiated Study Agreement (the “Study Agreement”) with the Cleveland Clinic. Pursuant to the Study Agreement, the Cleveland Clinic will use BreathTech’s BreathTest-1000™ to compare exhaled breath from individuals who have tested positive on a COVID-19 polymerase chain reaction (“PCR”) test with that from subjects who have had a negative COVID-19 PCR test. The goal of the study will be to analyze different volatile organic compounds from the breath to determine the correlation with different disease states.

As of July 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02 Leases: Topic 842 (“Topic 842”), using the modified retrospective method of adoption. Astrotech elected to use the transition option that allowed the Company to initially apply the newterminated its office lease ~~standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. The adoption of Topic 842 resulted in an adjustment to~~ ~~accumulated deficit~~ ~~of $230 thousand at the beginning of fiscal year 2020.~~

~~The Company had two existing facility leases and several small equipment leases.~~ ~~Astrotech leased office space consisting~~ of 5,219 square feet in Austin, Texas that housed executive management, finance and accounting, sales, and marketing and communications. The lease began in November 2016 and was originally ~~expired~~set to expire in December ~~2023. On August 3, 2020, the Company decided to terminate the lease.~~2023. Upon lease termination, the Company recognized a decrease in the related operating right-of-use (“ROU”) asset and operating lease liability of approximately $539 thousand and $506 thousand, ~~and $540 thousand,~~ respectively.

~~In May 2013, 1~~^st Detect completed build-out of a 16,540 square foot leased research and development and production facility in Webster, Texas. This facility is equipped with state-of-the-art laboratories, a clean room, a production shop, and offices for staff. The term of the lease is 62 months and includes options to extend for two additional five-year periods. In February 2015, 1^st Detect exercised its right of first refusal on the adjoining space of 9,138 square feet. The original lease began in May 2013 and was to expire in June 2018; these dates were amended in October 2014 with the amended lease beginning February 1, 2015, and expiring April 30, 2020, with provisions to renew and extend the lease for the entire premises, but not less than the entire premises, for two renewal terms of five years each. On June 1, 2018, the Company entered into its third amendment of the original lease removing 8,118 square feet from its leased space, leaving leased premises with a total square footage of 17,560. On January 21, 2020, the Company entered into its fourth amendment of the original lease, with the amended lease beginning May 1, 2020 and expiring April 30, 2021, with the option to renew and extend the lease for one renewal term of one year. During the second quarter of fiscal year 2021, the Company decided to allow the Webster lease to expire on its expiration date and declined the option to renew the lease. This resulted in a reduction of the related operating ROU asset and operating lease liability of $171 thousand and $192 thousand, respectively. Management has decided to let this lease expire as of April 30, 2021 and to consolidate the Company’s entire operation in Austin, Texas.

Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide

an implicit rate, the Company uses its incremental borrowing rate in determining the present value of lease payments. Significant

judgement is required when determining the Company’s incremental borrowing rate. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

~~Upon the adoption of Topic 842, the Company’s accounting for financing leases, previously referred to as capital leases, remains substantially unchanged from prior guidance.~~

The balance sheet presentation of the Company’s operating and finance leases is as follows:

(In thousands)	Classification on the Condensed Consolidated Balance Sheet	March 31, 2021		Classification on the Condensed Consolidated Balance Sheet	December 31, 2021
Assets:
Operating lease assets	Operating leases, right-of-use assets, net	$	26	Operating leases, right-of-use assets, net	$	206
Financing lease assets	Property and equipment, net		46	Property and equipment, net		516
Total lease assets		$	72		$	722

Liabilities:
Current:
Operating lease obligations	Lease liabilities, current	$	22	Lease liabilities, current	$	92
Financing lease obligations	Lease liabilities, current		10	Lease liabilities, current		135
Non-current:
Operating lease obligations	Lease liabilities, non-current		8	Lease liabilities, non-current		138
Financing lease obligations	Lease liabilities, non-current		32	Lease liabilities, non-current		283
Total lease liabilities		$	72		$	648

(In thousands)
For the Year Ended June 30,	Operating Leases		Financing Leases		Total		Operating Leases		Financing Leases		Total
2021	$	20	$	3	$	23
2022		6		12		18	$	52	$	77	$	129
2023		6		12		18		103		154		257
2024		—		12		12		93		154		247
2025		—		8		8		—		67		67
2026								—		—		—
Thereafter		—		—		—		—		—		—
Total lease obligations		32		47		79		248		452		700
Less: imputed interest		2		5		7		18		34		52
Present value of net minimum lease obligations		30		42		72		230		418		648
Less: lease liabilities - current		22		10		32		92		135		227
Lease liabilities - non-current	$	8	$	32	$	40	$	138	$	283	$	421

Cash payments for operating leases for the three months ended ~~March~~December 31, 2021 and ~~March 31,~~ 2020 totaled ~~$53~~$25 thousand and ~~$96~~$53 thousand, respectively. Cash payments for operating leases for the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~March 31,~~ 2020 totaled ~~$176~~$35 thousand and ~~$288~~$123 thousand, respectively.

Cash payments for financing leases for the three months ended ~~March~~December 31, 2021 and ~~March 31,~~ 2020 totaled $3$15 thousand and $1$3 thousand, respectively. Cash payments for financing leases for the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~March 31,~~ 2020 totaled $9$18 thousand and $1$6 thousand, respectively.

As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, property and equipment, net consisted of the following:

(In thousands)	March 31, 2021			June 30, 2020			December 31, 2021			June 30, 2021
Furniture, fixtures, equipment & leasehold improvements	$	1,951		$	2,522		$	1,289		$	535
Software		315			326			264			315
Capital improvements in progress		—			—			—			187
Gross property and equipment		2,266			2,848			1,553			1,037
Accumulated depreciation		(2,184	)		(2,512	)
Property held for disposal, net		—			(237	)
Accumulated depreciation and amortization								(683	)		(774	)
Property and equipment, net	$	82		$	99		$	870		$	263

Depreciation and amortization expense of property and equipment for the three months ended ~~March~~December 31, 2021 and ~~March 31,~~ 2020 ~~were $12~~was $34 thousand and ~~$48~~$15 thousand, respectively. Depreciation and amortization expense of property and equipment for the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~March 31,~~ 2020 ~~were $48~~was $51 thousand and ~~$189~~$37 thousand, respectively.

On August 3, 2020, the Company terminated its corporate office lease in Austin, Texas and wrote-off the remaining net book value of the related leasehold improvement assets in the amount of $229 thousand.

On February 11, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers named therein, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Registered Offering”), 2,845,535 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), ~~at an offering price of $3.25 per share.~~

~~The Registered Offering resulted in gross proceeds of approximately $9.25 million before deducting the placement agent’s fees and related offering expenses.~~

Pursuant to an engagement agreement, dated July 23, 2020, as amended, the Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent”) to act as the Company’s exclusive placement agent in connection with the Registered Offering. The Company has issued ~~to the Placement Agent, or its designees, warrants (the “Placement Agent’s Warrants”) to purchase up to 170,732~~280,898 shares of ~~Common Stock,~~Series D convertible preferred stock (“Series D Preferred Shares”), all of which ~~represents 6.0%~~are issued and outstanding. Series D Preferred Shares are convertible to common stock on a one-to-one basis. Series D Preferred Shares are not callable by the Company. The holder of the ~~Shares sold~~preferred stock is entitled to receive, and we shall pay, dividends on shares equal to and in the ~~Registered Offering. The Placement Agent’s Warrants~~same form as dividends actually paid on shares of common stock when, and if, such dividends are paid on shares of common stock. NaN other dividends are paid on the preferred shares. Preferred shares have ~~an exercise price of $4.0625 per share, which represents 125%~~no voting rights. Upon liquidation, dissolution, or winding-up of the ~~per share offering price~~Company, whether voluntary or involuntary, the preferred shares have preference over common stock. The holder of Series D Preferred Shares has the ~~Shares and a termination date of February 11, 2026. The Placement Agent’s Warrants had a fair value per share of $2.94 as of~~option to convert said shares to common stock at the ~~date of issuance.~~holder’s discretion.

~~From November 9, 2018 through March 25, 2020,~~The holder of the preferred stock previously agreed with the Company ~~sold 793,668 shares of Common Stock pursuant to an At-the-Market Issuance Sales Agreement (the “B. Riley ATM Agreement”) with B. Riley FBR, under which B. Riley FBR acted~~that they would not convert the preferred stock until such time as the ~~sales agent. In connection~~amendment to the Certificate of Incorporation (the “2020 Certificate Amendment”) was accepted for filing with the ~~sale~~state of these shares of Common Stock, the Company received net proceeds of $2.3 million. The weighted-average sale price per share was $3.04. No additional shares of the Company’s Common Stock will be sold pursuant to the B. Riley ATM Agreement. The Company did not incur any termination penalties as a result of its termination of the B. Riley ATM Agreement.

~~On December 18, 2020, the Company entered into an At-the-Market offering agreement (the “Wainwright ATM Agreement”) with H.C. Wainwright & Co., LLC as agent, pursuant to~~Delaware, which ~~the Company may offer and sell, from time to time through H.C. Wainwright, shares of the Company’s Common Stock. During the second quarter of fiscal 2021,~~ the Company sold 1,139,323 shares of Common Stock pursuant to the Wainwright ATM Agreement. In connection with the sales of these shares of Common Stock, the Company received gross proceeds of approximately $3.6 million. The weighted-average sale price per shares was $3.14.occurred in October 2021.

A summary of the common stock warrant activity for the ~~three~~six months ended ~~March~~December 31, 2021 is presented below:

	Shares (In thousands)		Weighted Average Exercise Price		Aggregate Fair Market Value at Issuance (In thousands)		Weighted Average Remaining Contractual Term (Years)		Number of Shares Underlying Warrants (In thousands)		Weighted Average Exercise Price		Aggregate Fair Market Value at Issuance (In thousands)		Weighted Average Remaining Contractual Term (Years)
Outstanding June 30, 2020		86	$	5.14	$	194		4.74
Outstanding June 30, 2021										2,393	$	2.40	$	3,747		4.63
Warrants issued		813		3.08		1,758		4.42		—		—		—		—
Warrants exercised		—		—		—		—		—		—		—		—
Warrants expired		—		—		—		—		—		—		—		—
Outstanding March 31, 2021		899	$	3.28	$	1,952		4.57
Outstanding December 31, 2021										2,393	$	2.40	$	3,747		4.10

The Company has made an immaterial error correction to the table above to reflect the correct weighted average exercise price and weighted average remaining contractual term reported as of June 30, 2021. Management evaluated the materiality of the error, both quantitatively and qualitatively, and concluded that it was not material to the financial statements of any period presented.

The following represents a summary of the warrants outstanding at each of the dates identified:

					Number of Shares Underlying Warrants								Number of Shares Underlying Warrants (In thousands)
Issue Date	Classification	Exercise Price		Expiration Date	March 31, 2021		June 30, 2020		Classification	Exercise Price		Expiration Date	December 31, 2021		June 30, 2021
March 26, 2020	Equity	$	6.25	March 25, 2025		24,780		24,780	Equity	$	6.25	March 25, 2025		25		25
March 30, 2020	Equity	$	4.69	March 27, 2025		61,133		61,133	Equity	$	4.69	March 27, 2025		61		61
October 23, 2020	Equity	$	2.88	October 21, 2025		469,565		—	Equity	$	2.88	October 21, 2025		470		470
October 28, 2020	Equity	$	2.69	October 28, 2025		173,274		—	Equity	$	2.69	October 28, 2025		173		173
February 16, 2021	Equity	$	4.06	February 11, 2026		170,732		—	Equity	$	4.06	February 11, 2026		171		171
April 12, 2021									Equity	$	1.88	April 7, 2026		1,493		1,493
Total Outstanding						899,484		85,913						2,393		2,393

As previously noted in our Form 10-K for the fiscal year ended June 30, 2020, the Company was not in compliance with the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1) for continued listing on The Nasdaq Capital Market because its stockholders’ equity was below the required minimum of $2.5 million at June 30, 2020. On ~~September 11, 2020,~~December 21, 2021, the Company received a ~~notice~~deficiency letter from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market LLC (“~~Nasdaq”~~NASDAQ”) ~~stating that it was not in~~notifying the Company of its failure to maintain compliance with the $1.00 per share of common stock minimum closing bid price requirement over the preceding 30 consecutive business days as required ~~stockholder’s equity~~by Marketplace Rule 5550(a)(2). The letter stated that the Company has 180 calendar days, or until June 20, 2022, to regain compliance. If at any time during this 180-day period the closing bid price of ~~$2.5 million.~~the Company’s common stock is at least $1.00 per share for a minimum of ten consecutive business days, the Company’s compliance will be regained.

In the event the Company does not regain compliance in that period, it may be eligible to apply for an additional 180 calendar days to regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The NASDAQ Capital Market, with the exception of the bid price requirement. The Company will also need to provide written notice of its intention to cure the deficiency during the second compliance period. However, if it appears to the NASDAQ staff that the Company will neither be able nor otherwise eligible to cure the deficiency, it may be subject to delisting by NASDAQ.

The ~~notice had no immediate effect on~~Company has not yet determined what action, if any, it will take in response to this letter, although the ~~Company’s listing on The Nasdaq Capital Market. The~~ Company ~~originally had until October 26, 2020~~intends to ~~submit~~monitor the closing bid price of its common stock between now and June 19, 2022, and to consider available options if its common stock does not trade at a ~~plan~~level likely to ~~regain~~result in the Company regaining compliance with ~~the~~The NASDAQ Capital Market minimum ~~stockholders’ equity requirement; however, Nasdaq granted an extension of the deadline to submit a plan until November 2, 2020.~~

~~Following the successful offerings of the Company’s Common Stock during the current and prior fiscal quarters, the Company is now in compliance with the minimum stockholders’ equity~~closing bid price requirement.

Basic net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed based on the weighted average number of common shares outstanding plus the effect of potentially dilutive common shares outstanding during the period using the treasury stock method and the if-converted method. Potentially dilutive common shares include outstanding stock options and share-based awards.

The following table reconciles the numerators and denominators used in the computations of both basic and diluted net loss per share:

	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended December 31,						Six Months Ended December 31,
(In thousands, except per share data)	2021			2020			2021			2020			2021			2020			2021			2020
Numerator:
Net loss	$	(2,403	)	$	(2,068	)	$	(6,136	)	$	(6,219	)	$	(2,180	)	$	(1,622	)	$	(4,209	)	$	(3,733	)
Denominator:
Denominator for basic and diluted net loss per share — weighted average common stock outstanding		18,171			6,107			14,649			5,934			47,482			15,864			47,455			11,769
Basic and diluted net loss per common share:
Net loss	$	(0.13	)	$	(0.34	)	$	(0.42	)	$	(1.05	)	$	(0.05	)	$	(0.10	)	$	(0.09	)	$	(0.32	)

All unvested restricted stock awards for the ~~nine~~six months ended ~~March~~December 31, 2021 are not included in diluted net loss per share, as the impact to net loss per share would be anti-dilutive. Options to purchase ~~371,025~~152,532 shares of common stock at exercise prices

ranging from $1.85 to ~~$8.35~~$6.00 per share outstanding as of ~~March~~December 31, 2021 were not included in diluted net loss per share, as the impact to net loss per share would be anti-dilutive.

Astrotech recognizes revenue employing the generally accepted revenue recognition methodologies described under the provisions of Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers” (“Topic 606”), which was adopted by the Company in fiscal year 2019. The methodology used is based on contract type and how products and services are provided. The guidelines of Topic 606 establish a five-step process to govern the recognition and reporting of revenue

from contracts with customers. The five steps are: (i) identify the contract with a customer, (ii) identify the performance obligations within the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations within the contract, and (v) recognize revenue when or as the performance obligations are satisfied.

An additional factor is reasonable assurance of collectability. This necessitates deferral of all or a portion of revenue recognition until collection. During the ~~three and nine~~six months ended ~~March~~December 31, 2021, the Company had ~~two~~2 revenue ~~sources.~~sources that comprised all of its revenue. Revenue was recognized at a point in time consistent with the guidelines in Topic 606.

The Company disaggregates revenue by reporting segment to depict the nature of revenue in a manner consistent with its business operations and to be consistent with other communications and public filings. Refer to ~~Note 13~~ ~~for additional details of revenues by reporting segment.~~

Contract Assets and Liabilities. The Company enters into contracts to sell products and provide services, and it recognizes contract assets and liabilities that arise from these transactions. The Company recognizes revenue and corresponding accounts receivable according to Topic 606 and, at times, ~~recognize~~recognizes revenue in advance of the time when contracts give us the right to invoice a customer. The Company may also receive consideration, per the terms of a contract, from customers prior to transferring goods to the customer. The Company records customer deposits as deferred revenue. Additionally, the Company may receive payments, most typically for service and warranty contracts, at the onset of the contract and before services have been performed. In such instances, the Company records a deferred revenue liability. The Company recognizes these contract liabilities as sales after all revenue recognition criteria are met.

Practical Expedients. In cases where the Company is responsible for shipping after the customer has obtained control of the goods, the Company has elected to treat the shipping activities as fulfillment activities rather than as a separate performance obligation. Additionally, the Company has elected to capitalize the cost to obtain a contract only if the period of amortization would be longer than one year. The Company only gives consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year.

Product Sales. The Company recognizes revenue from sales of products upon shipment or delivery when control of the product transfers to the customer, depending on the terms of each sale, and when collection is probable. In the circumstance where terms of a product sale include subjective customer acceptance criteria, revenue is deferred until the Company has achieved the acceptance criteria unless the customer acceptance criteria are perfunctory or inconsequential. The Company generally offers customers payment terms of ~~less than one year.~~60 days or less.

Freight. The Company records shipping and handling fees that it charges to its customers as revenue and related costs as cost of revenue.

Multiple Performance Obligations. Certain agreements with customers include the sale of equipment involving multiple elements in cases where obligations in a contract are distinct and thus require separation into multiple performance obligations, revenue recognition guidance requires that contract consideration be allocated to each distinct performance obligation based on its relative standalone selling price. The value allocated to each performance obligation is then recognized as revenue when the revenue recognition criteria for each distinct promise or bundle of promises has been met.

The standalone selling price for each performance obligation is an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the good or service. When there is only one performance obligation associated with a contract, the entire amount of consideration is attributed to that obligation. When a contract contains multiple performance obligations, the standalone selling price is first estimated using the observable price, which is generally a list price net of applicable discount or the price used to sell the good or service in similar circumstances. In circumstances when a selling price is not directly observable, the Company will estimate the standalone selling price using information available to it including its market assessment and expected cost, plus margin.

The timetable for fulfilment of each of the distinct performance obligations can range from completion in a short amount of time and entirely within a single reporting period to completion over several reporting periods. The timing of revenue recognition for each performance obligation may be dependent upon several milestones, including physical delivery of equipment, completion of site acceptance test, and in the case of after-market consumables and service deliverables, the passage of time.

~~The accounting standard for fair value measurements~~ASC Topic 820 “Fair Value Measurement” (“Topic 820”) defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. ~~The standard~~Topic 820 is applicable whenever assets and liabilities are measured and included in the financial statements at fair value.

The fair value hierarchy established in ~~the standard~~Topic 820 prioritizes the inputs used in valuation techniques into three levels as follows:

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

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

AsThe following tables present the carrying amounts, estimated fair values, and valuation input levels of ~~March~~certain financial instruments as of December 31, 2021 t~~he fair~~and June 30, 2021:

The value of ~~the Company’s cash and cash equivalents approximate their carrying value due to their short-term nature.~~ available-for-sale investments is based on pricing from third-party pricing vendors, who use quoted prices in active markets for identical assets (Level 1 inputs).

On September 5, 2019, the Company entered into a private placement transaction with Thomas B. Pickens III, the Chief Executive Officer and Chairman of the Board of Directors of the Company for the issuance and sale of a secured promissory note ~~(“Note No. 1”)~~ to Mr. Pickens with a principal amount of $1.5 ~~million.~~million (the “2019 Note”), and on February 13, 2020, the Company entered into a second private placement transaction with Mr. Pickens for the issuance and sale of a second secured promissory note to Mr. Pickens with a principal amount of $1.0 million (the “2020 Note” and, collectively with the 2019 Note, the “Original Notes”). Interest on ~~Note No. 1 shall accrue~~the Original Notes accrued at 11% per annum. The principal amount and accrued interest on ~~Note No. 1 shall~~the Original Notes originally were to become due and payable on September 5, 2020; however, on August 24, 2020, the Company and Mr. Pickens agreed to extend the date of maturity of the Original Notes and payment of accrued interest to September 5, 2021 (the ~~“Maturity~~“Original Maturity Date”). The Company ~~may~~had the option to prepay the principal amount and all accrued interest on ~~Note No. 1~~the Original Notes at any time prior to the Original Maturity Date.

In connection with the issuance of ~~Note No. 1,~~the Original Notes, the Company, along with 1^st Detect Corporation and Astrotech Technologies, Inc. (the “Subsidiaries”), entered into atwo security ~~agreement,~~agreements, dated as of September 5, 2019 and February 13, 2020 (collectively, the “Original Security Agreements”), with Mr. Pickens, ~~(the “Security Agreement No. 1”),~~ pursuant to which the Company and the Subsidiaries granted to Mr. Pickens a security interest in all of the Company’s and the Subsidiaries’ Collateral, as such term is defined in the Original Security ~~Agreement No. 1.~~Agreements. In addition, the Subsidiaries jointly and severally agreed to guarantee and act as surety for the Company’s obligation to repay ~~Note No. 1~~the Original Notes pursuant to a subsidiary guarantee.

On ~~February 13, 2020,~~September 3, 2021, the Company entered into ~~a second private placement transaction~~(1) the Omnibus Amendment to the Secured Promissory Notes (the “Amended Notes”) with Mr. Pickens, ~~for~~in connection with the ~~issuance~~Original Notes, and ~~sale of a secured promissory note (“Note No. 2”~~(2) the Omnibus Amendment to the Security Agreements (the “Amended Security Agreements”, and together with the Amended Notes, the “Amendments”) with the Subsidiaries, in connection with the Original Security Agreements. Pursuant to ~~Mr. Pickens with a~~the Amendments, (a) the principal amount of $1.0 ~~million. Interest on Note No. 2 shall accrue at 11% per annum. The principal amount~~million and accrued interest ~~on Note No. 2 shall become due and payable~~of $172 thousand on the ~~Maturity Date. The Company may prepay~~2020 Note was paid in full and the 2020 Note was cancelled, and (b) $1.0 million of the principal amount and ~~all~~$330 thousand of accrued interest on the 2019 Note No. 2 at any time prior to the Maturity Date. In connection with the issuance of Note No. 2, the Company, along with the Subsidiaries, entered into a second security agreement, dated as of February 13, 2020, with Mr. Pickens (the “Security Agreement No. 2”), pursuant to which the Companywas paid and the ~~Subsidiaries granted to Mr. Pickens a security interest in all~~maturity date on the remaining balance of $500 thousand of the ~~Company’s and the Subsidiaries’ Collateral, as such term is defined in Security Agreement No. 2.~~ 2019 Note was extended to September 5, 2022 (the “Amended Maturity Date”).

In addition, the Subsidiaries jointly and severally agreed to guarantee and act as surety for the Company’s obligation to repay the remaining balance on the 2019 Note ~~No. 2~~ pursuant to a subsidiary ~~guarantee.~~

Onguarantees, dated September 5, 2019 and February 13, 2020, respectively, as amended by the Omnibus Amendments to Subsidiary Guarantees, dated August 24, 2020 and September 3, 2021, respectively (the Omnibus Amendment to Subsidiary Guarantees dated September 3, 2021, the ~~Company and Mr. Pickens agreed~~“Amended Subsidiary Guarantee”). The Subsidiary Guaranty with respect to ~~extend~~ the ~~Maturity Date of both~~2020 Note was also cancelled by the ~~notes and payment of accrued interest~~Amended Subsidiary Guarantee due to ~~September 5, 2021.~~ ~~Interest expense related to both notes for~~ the ~~three and nine months ended March 31, 2021 was approximately $68 thousand and $206 thousand, respectively.~~2020 Note being repaid in full.

On April 14, 2020, the Company entered into a promissory note under the Paycheck Protection Program “(PPP”) for $542 thousand (the “PPP Promissory Note”) with a commercial bank (the “Bank”) under t~~he Coronavirus Aid, Relief, and Economic Security~~ Act (the “CARES Act”). The PPP Promissory Note bears interest at a rate of 1.0% per annum. Payments are due monthly beginning November 10, 2020. The remaining principal amount of the PPP Promissory Note along with any unpaid interest is due on April 1, 2022. The principal and interest may be forgiven if the proceeds are used for forgivable purposes as defined by the terms in the PPP Promissory Note, and the Company has used the proceeds from the PPP Promissory Note for forgivable purposes as defined by the terms of the PPP Promissory Note.

On October 19, 2020, as required by the Small Business Administration (the “SBA”) prior to executing a securities purchase agreement on October 21, 2020, , the Company and the Bank entered into a Cash Reserve Agreement wherein the Company agreed to deliver to the Bank an amount equal to ~~$542 thousand~~ to be held in a separate restricted cash account in accordance with the terms and conditions of the Cash Reserve Agreement for the purpose of establishing a source of payment for the Company’s obligations to repay and/or obtain forgiveness of the PPP Promissory Note. ~~In connection therewith, the Company applied for forgiveness under the provisions of the CARES Act.~~ On April 19, 2021, the Company received notification from the Bank that the SBA has granted full forgiveness of the Company’s PPP Promissory Note. In addition, the restriction on the cash in the Cash Reserve Agreement was released. ~~Interest expense related to the PPP Promissory Note for the three and nine months ended March 31, 2021 was approximately $1 thousand and $2 thousand, respectively.~~

For the each of the three and ~~nine~~six months ended ~~March~~December 31, 2021, the Company had ~~two~~2 customers that ~~materially~~ comprised all of the Company’s revenue. ~~For the three and nine months ended March 31, 2020, the Company had one customer that materially comprised all of the Company’s revenue.~~

The Company maintains funds in bank accounts that may exceed the limit insured by the Federal Deposit Insurance Corporation of $250 thousand per depositor. The risk of loss attributable to these uninsured balances is mitigated by depositing funds in what we believe to be high credit quality financial institutions. The Company has not experienced any losses in such accounts.

The Company’s stock option activity for the ~~nine~~six months ended ~~March~~December 31, 2021 is as follows:

	Shares (in thousands)			Weighted Average Exercise Price		Shares (In thousands)			Weighted Average Exercise Price
Outstanding at June 30, 2020		325		$	5.68
Outstanding at June 30, 2021							275		$	5.25
Granted		50			5.00		—			—
Exercised		—			—		—			—
Canceled or expired		(4	)		5.19		(122	)		4.96
Outstanding at March 31, 2021		371		$	5.59
Outstanding at December 31, 2021							153		$	5.41

The aggregate intrinsic value of options exercisable at ~~March~~December 31, 2021 was $0, as the fair value of the Company’s common stock is less than the exercise prices of these options. The remaining stock-based compensation expense of ~~$88~~$1 thousand related to stock options will be recognized over a weighted-average period of ~~2.96~~0.78 years.

The table below details the Company’s stock options outstanding as of ~~March~~December 31, 2021:

Compensation costs recognized related to stock option awards were $0 ~~and $43 thousand~~ for each of the three months ended ~~March~~December 31, 2021, and 2020 ~~respectively~~ and $1 thousand ~~and $128 thousand~~ for each of the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~2020, respectively.~~2020.

The Company’s restricted stock activity for the ~~nine~~six months ended ~~March~~December 31, 2021, is as follows:

	Shares (in thousands)			Weighted Average Grant-Date Fair Value		Shares (In thousands)			Weighted Average Grant-Date Fair Value
Outstanding at June 30, 2020		133		$	3.95
Outstanding at June 30, 2021						$	2,023		$	2.05
Granted		2,019			2.02		—			—
Vested		(58	)		1.84		(28	)		3.39
Canceled or expired		(23	)		5.40		—			—
Outstanding at March 31, 2021	$	2,071		$	2.07
Outstanding at December 31, 2021						$	1,995		$	2.03

Stock compensation expenses related to restricted stock were ~~$194~~$439 thousand and ~~$52~~$46 thousand for the three months ended ~~March~~December 31, 2021, and 2020, respectively, and ~~$284~~$797 thousand and ~~$154~~$90 thousand for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively. The remaining stock-based compensation expense of ~~$4.2~~$3.0 million related to restricted stock awards granted will be recognized over a weighted-average period of ~~2.93~~2.23 years.

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are more likely than not to be realized. As of ~~March~~December 31, 2021, the Company established a valuation allowance against all of its net deferred tax assets.

For the three months ended ~~March~~December 31, 2021 and 2020, the Company incurred pre-tax losses in the amount of ~~$2.4~~$2.2 million and ~~$2.1~~$1.6 million, respectively. For the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, the Company incurred pre-tax losses in the amount of ~~$6.1~~$4.2 million and ~~$6.2~~$3.7 million, respectively. The total effective tax rate was approximately 0% for the each of the three and six months ended December 31, 2021 and 2020.

For each of the six months ended December 31, 2021 and 2020, the Company’s effective tax rate differed from the federal statutory rate of 21%, primarily due to the valuation allowance placed against its net deferred tax assets.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES ~~Act~~Act”) was signed into law on March 27, 2020. The CARES Act provided certain tax relief measures including the acceleration of the alternative minimum tax (“AMT”) credit previously paid. The CARES Act allows for the acceleration of the refundable AMT credit up to 100% of the AMT credit. In response to the impact of the CARES Act, the Company received the remaining AMT credit of $429 thousand for AMT previously paid during the three months ended September 30, 2020.

~~Provision~~FASB ASC 740, “Income Taxes” addresses the accounting for ~~Income Tax~~

~~The Company’s effective tax rate is 0% for~~uncertainty in income tax ~~for the nine months ended March 31, 2021~~recognized in an entity’s financial statements and ~~the Company expects that its effective tax rate~~prescribes a recognition threshold and measurement attribute for the full fiscal year 2021 year will be 0%. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that its U.S. federal and state deferred tax assets will not be realized and therefore a full valuation allowance has been provided on the U.S. federal and state net deferred tax assets.

In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership over a three-year period (a Section 382 ownership change), utilization of its pre-change net operating loss (“NOL”) carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code. Generally, U.S. state laws have laws similar to Internal Revenue Code Section 382. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforward before utilization.

The Company files U.S. federal and state income tax returns. The Company is not currently subject to any income tax examinations. Since the Company’s inception, the Company had incurred losses from its U.S. operations, which generally allows all tax years to remain open to income tax examinations for all years for which there are loss carryforwards.

~~The Company recognizes the~~ financial statement ~~effects~~disclosure of tax positions taken or expected to be taken on a tax ~~position when it becomes more likely than not, based upon the technical merits, that the position will be sustained upon examination.~~return. The Company currently has ~~no unrecognized~~approximately $300 thousand of uncertain tax ~~benefits and~~positions as of December 31, 2021, all of which are accounted as contra-deferred tax assets. The Company does ~~not~~0t expect any ~~material~~significant changes to its uncertain tax positions in the ~~next~~coming 12 ~~months in unrecognized tax benefits.~~months.

~~Income Taxes~~Loss carryovers are generally subject to modification by tax authorities until three years after they have been utilized; as such, the Company is subject to examination for the fiscal years ended 2001 through present for federal purposes and fiscal years ended 2006 through present for state purposes.

~~There is $0 provision for income taxes during the three and nine months ended March 31, 2021. There was $0 provision for income taxes during the three and nine months ended March 31, 2020.~~

The Company is subject to various lawsuits and other claims in the normal course of business. In addition, from time to time, the Company receives communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which the Company operates.

The Company establishes reserves for the estimated losses on specific contingent liabilities, for regulatory and legal actions where the Company deems a loss to be probable and the amount of the loss can be reasonably estimated. In other instances, the Company is not able to make a reasonable estimate of liability because of the uncertainties related to the outcome or the amount or range of potential loss.

On April 15, 2021, a putative stockholder of the Company commenced a class action and derivative lawsuit in the Delaware Court of Chancery, Stein v. Pickens, et al., C.A. No. 2021-0322-JRS (the “Stein Action”), in which it iswas alleged, among other things, that the Company improperly included broker non-votes in the tabulation of votes counted in favor to approve an amendment to the Company’s Certificate of Incorporation (the “2020 Certificate Amendment”) and, thus the 2020 Certificate Amendment was defective. The Company investigated ~~these~~those allegations and ~~disputes them.~~

Ondoes not believe that the filing and effectiveness of the 2020 Certificate Amendment was either invalid or ineffective. Nevertheless, to resolve any uncertainty, on April 30, 2021, the Company filed a validation proceeding in the Delaware Court of Chancery, In re Astrotech Corporation,, C.A. No. 2021-0380-JRS, pursuant to Section 205 of the Delaware General Corporation ~~Law (the “Section 205 Action”). The Company does not believe that~~Law. On October 6, 2021, the ~~filing~~Delaware Court of Chancery granted the Company’s request and ~~effectiveness of~~confirmed and validated the 2020 Certificate ~~Amendment is either invalid or ineffective. However,~~Amendment. Thereafter, a settlement in principle was reached with the Plaintiffs in the Stein Action and the parties to ~~resolve any uncertainty,~~ the ~~Company is pursuing corrective actions to ratify~~Stein Action presently anticipate presenting the ~~2020 Certificate Amendment through~~settlement for approval in the ~~filing~~first half of ~~the Section 205 Action.~~2022.

Further information regarding the Stein Action and the Section 205 Action is provided in the Schedule 14A proxy statement amendment and supplement filed by the Company with the ~~Securities and Exchange Commission~~SEC on April 29, 2021.

The Company ~~currently~~ has ~~two reportable business units: 1~~^st ~~Detect Corporation and AgLAB Inc.~~determined that it does not meet the criteria of ASC 280 “Segment Reporting” because the Company’s subsidiaries represent Company brands that leverage the same core technology rather than independent operating segments. Furthermore, restatement of prior results is not necessary as they would mirror the consolidated results.

1^st ~~Detect is a manufacturer of explosives and narcotics trace detectors developed for use at airports, secured facilities, and borders worldwide.~~

~~AgLAB is developing a series of mass spectrometers for use in the agriculture market for process control and the detection of trace amounts of solvents and pesticides.~~

~~All intercompany transactions between business units have been eliminated in consolidation.~~

The Company has taken what it believes are necessary precautions to safeguard its employees from the COVID-19 pandemic. The Company continues to follow the Centers for Disease Control and Prevention’s (“CDC”) guidance and the recommendations and restrictions provided by state and local authorities. All of the Company’s employees who do not work in a lab setting are currently on a telecommunication work arrangement and have been able to successfully work remotely. The Company’s lab requires in-person staffing, and the Company has been able to continue to operate its ~~lab, minimizing infection risk to lab staff~~

~~through a combination of social distancing and appropriate protective equipment.~~lab. There can be no assurance, however, that key employees will not become ill or that the Company will be able to continue to operate its labs.

To date, the Company has seen delays with respect to the TSA certification process and parts of its supply chain, particularly the impact of the global semiconductor and electronics shortage, which has now resulted in product pricing inflation. In addition, although passenger demand for air travel has rebounded, the overall recovery of the airline industry and ancillary services remains highly uncertain and is dependent upon, among other things, the number of cases declining around the globe, public health impacts of new COVID-19 variants, the continued administration of vaccines to unvaccinated populations, and the duration of immunity granted by vaccines.

The ~~continuing~~Company continues to manage production, to secure alternative supplies, and to take other proactive actions. The Company believes that it will be able to pass the inflation caused by raw materials shortages and increased shipping costs to its customers by increasing the price of its instruments. If supply chain shortages become more severe or longer term in nature, the Company’s business and results of operations could be adversely impacted; however, the Company does not expect this issue to materially adversely affect its liquidity position. The long-term impact ~~that~~of the COVID-19 pandemic ~~will have~~ on the Company’s ~~operations, including duration, severity, and scope, remains uncertain and cannot~~ business may not be fully ~~predicted at this time. Accordingly,~~reflected until future periods.

The Company continues to evaluate the ~~Company believes that~~current and potential impact of the ~~COVID-19~~ pandemic ~~could continue to adversely impact~~on its business, results of operations, ~~cash flows,~~ and consolidated financial ~~condition~~statements. The Company also continues to actively monitor developments and business conditions that may cause it to take further actions that alter business operations as may be required by applicable authorities or that it determines are in the ~~future.~~

~~As the Company’s business operations continue to be impacted by the pandemic, the Company continues to monitor the situation~~best interests of its employees, customers, suppliers, and the guidance that is being provided by relevant federal, state, and local public health authorities. The Company may take additional actions based upon their recommendations. However, it is possible that the Company may have to make further adjustments to its operating plans in reaction to developments that are beyond its control.stockholders.

On March 27, 2020, the CARES Act was enacted. The CARES Act, among other things, includes provisions relating to refundable payroll taxes, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The most significant relief measures which the Company ~~qualifies~~qualified for are a loan pursuant to the ~~PPP Promissory Note,~~Paycheck Protection Program for which the Company has received full forgiveness, alternative minimum tax credit refunds, employee retention credit, and payroll tax deferral.The payroll tax deferral was effective from the enactment date through December 31, 2020, and the deferred amount will be repaid in two installments. 50% of the deferred amount has been paid as of December 31, 2021, and the remainder will be due by December 31, 2022. The deferred payroll taxes are recorded within accrued liabilities on the condensed consolidated balance sheets.

The Company will continue to assess the treatment of the CARES Act to the extent additional guidance and regulations are issued, the further applicability of the CARES Act to the Company, and the potential impacts on the business.

~~On April 7,~~The Company has analyzed its operations subsequent to December 31, 2021 the Company entered into an amended and restated underwriting agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) to issue and sell, in an underwritten, firm-commitment public offering (the “Offering”), 21,639,851 shares of the Company’s Common Stock. ~~The offering price~~ to the ~~public~~date these unaudited condensed consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose in the Offering was $1.50 per share of Common Stock and Wainwright agreed to purchase the shares from the Company pursuant to the Underwriting Agreement at a price of $1.395 per share, representing an underwriting discount of seven percent (7.0%). Pursuant to the Underwriting Agreement, the Company also granted Wainwright an option to purchase, for a period of 30 days from the date of the Underwriting Agreement, up to an additional 3,245,977 shares of Common Stock. On April 12, 2021, Wainwright exercised the option in full.

The Offering resulted in aggregate gross proceeds, including the option exercise, of approximately $37.3 million, before deducting underwriting discounts and commissions and estimated offering expenses.

Pursuant to the Underwriting Agreement, the Company issued warrants (the “Underwriter Warrants”) to Wainwright (in its capacity as the underwriter of the Offering) or its designees to purchase shares of Common Stock in an amount equal to 6.0% of the aggregate number of shares sold in the Offering, or 1,493,150 shares of Common Stock in the aggregate, at an exercise price of $1.875 per share. The Underwriter Warrants will be exercisable immediately on or after the date the Company receives shareholder approval to increase its number of authorized shares and upon filing its amendment of certificate of incorporation with the Secretary of State of Delaware and will expire five years after the commencement of the sales of this offering.

Subsequent to the end of the quarter, the Company received full forgiveness of its PPP Promissory Note in the amount of $541,500 from the SBA. The funds previously held in escrow by the Bank were released to the Company.

~~On April 27, 2021, the Company entered into a new office lease for approximately 6,000 square feet in Austin, Texas~~ ~~that will include a research and development laboratory, a production shop, and limited offices for staff, as many of the Company’s employees work remotely.~~ The 36-month lease commences on or around June 1, 2021 with lease rates ranging from $7,950 per month for the first 12 months to $8,400 per month for the final year. The Company is accounting for the lease as an operating lease.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. Forward-looking statements may include the words “may,” “will,” “plans,” “believes,” “estimates,” “expects,” “intends,” and other similar expressions. Such statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in the statements. Such risks and uncertainties include, but are not limited to:

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could be inaccurate; therefore, we cannot assure you that the forward-looking statements included in this Quarterly Report on Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in our forward-looking statements, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Some of these and other risks and uncertainties that could cause actual results to differ materially from such forward-looking statements are more fully described in our ~~2020~~2021 Annual Report on Form 10-K, elsewhere in this Quarterly Report on Form 10-Q, or in the documents incorporated by reference herein. Except as may be required by applicable law, we undertake no obligation to publicly update or advise of any change in any forward-looking statement, whether as a result of new information, future events, or otherwise. In making these statements, we disclaim any obligation to address or update each factor in future filings with the Securities and Exchange Commission (“SEC”) or communications regarding our business or results, and we do not undertake to address how any of these factors may have caused changes to discussions or information contained in previous filings or communications. In addition, any of the matters discussed above may have affected our past results and may affect future results, so that our actual results may differ materially from those expressed in this Quarterly Report on Form 10-Q and in prior or subsequent communications.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes included in Part I, Item 1 of this Report.

Astrotech Corporation (Nasdaq: ASTC) (“Astrotech,” the “Company,” “we,” “us,” or “our”), a Delaware corporation organized in 1984, is a ~~science and technology development and commercialization~~mass spectrometry company that launches, manages, and ~~builds~~commercializes scalable companies based on its innovative ~~technology in order to maximize shareholder value.~~core technology.

~~The Company’s~~Our efforts are focused on commercializing ~~its~~our platform mass spectrometry technology through ~~its~~our wholly-owned subsidiaries:

ATI owns and licenses the AMS Technology, the platform mass spectrometry technology originally developed by 1^st1st Detect. Long recognized as the gold standard in chemical detection, mass spectrometry has historically been too costly, bulky, and cumbersome. In contrast, the AMS Technology has been designed to be inexpensive, small, and easy to use. Unlike other technologies, the AMS Technology works under ultra-high vacuum, which eliminates competing molecules, yielding higher resolution and fewer false alarms. The intellectual property includes 2824 granted patents and two additional patents in process along with extensive trade secrets. With a number of diverse market opportunities for the core technology, ATI is structured to license the intellectual property for different fields of use. ATI currently licenses the AMS Technology to three wholly-owned subsidiaries of Astrotech on an exclusive basis, including to 1^st Detect for use in the security and detection market, to AgLAB for use in the agriculture market, and to BreathTech for use in breath analysis.

~~On March 24, 2021,~~ ATI ~~signed a Letter of Agreement (the “LOA”) effective as of March 24, 2021 by and among ATI and~~has contracted with Sanmina Corporation (“Sanmina”).

~~Under~~, a leading contract manufacturer with a worldwide presence. Sanmina has already helped to reduce the ~~LOA, Sanmina will procure and inspect components, parts, and raw materials and manufacture, assemble, test, inspect, configure, store, and ship the products for any~~cost of the ~~licensees~~TRACER 1000™, and we have leveraged their expertise to improve manufacturability and reliability of ~~ATI.~~our systems.

1^st Detect, ~~an exclusive~~a licensee of ATI for the security and detection market, has developed the TRACER ~~1000™,~~1000, the world’s first mass ~~spectrometer~~spectrometry (“MS”) based explosives trace detector (“ETD”) certified by the European Civil Aviation Conference (“ECAC”), designed to replace the ETDs used at airports, cargo ~~facilities,~~and other secured facilities, and borders worldwide. We believe that ETD customers are unsatisfied with the currently deployed ETD technology, which is driven by ion mobility spectrometry (“IMS”). We believe that IMS-based ETDs are fraught with false positives, as they often misidentify personal care products and other common household chemicals as explosives, causing facility shutdowns, unnecessary delays, frustration, and significant wasted security resources. In addition, there are hundreds of different types of explosives, but IMS-based ETDs have a very limited threat detection library reserved only for those several explosives of largest concern. Adding additional compounds to the detection library of an IMS-based ETD fundamentally reduces the instrument’s performance, further increasing the likelihood of false alarms. In contrast, adding additional compounds to the TRACER 1000’s detection library does not degrade ~~the TRACER 1000’s~~its detection capabilities, as it has a virtually unlimited and easily expandable threat library. With terrorist threats becoming more numerous, sophisticated, and lethal, security professionals have been looking for better instrumentation, and specifically for mass spectrometry, to address the evolving threats, but mass spectrometry has long been too expensive, too cumbersome, and not practical for security applications until the launch of the TRACER 1000.

In order to sell the TRACER 1000 to airport and cargo security customers in the European Union and certain other countries, ECAC certification is required. ~~Certain other countries also~~We are currently selling the TRACER 1000 to customers who accept ECAC certification. ~~After receiving ECAC certification~~We have deployed or received orders for the TRACER 1000 ~~on February 21, 2019, we are now marketing to~~in approximately twenty locations in thirteen countries throughout Europe and ~~taking orders from airports and cargo facilities outside of the U.S. that accept ECAC certification.~~Asia.

On June 26, 2019, the Company announced the official launch of the TRACER 1000, and on November 22, 2019, we announced our first commercial sale of TRACER 1000 units to a global shipping and logistics company.

In the United States, we are working with the U.S. Transportation Security Administration (“TSA”) towards ~~Air Cargo~~air cargo certification. On March 27, 2018, we announced that the TRACER 1000 was accepted into TSA’s Air Cargo Screening Technology Qualification Test (“ACSQT”) and, on April 4, 2018, we announced that the TRACER 1000 was beginning testing with TSA for passenger screening at airports. On November 14, 2019, we announced that the TRACER 1000 had been selected by the TSA’s Innovation Task Force to conduct live checkpoint screening at Miami International Airport. With similar protocols as ECAC testing, we have received valuable feedback from all programs. Following ECAC certification and our early traction within the cargo market, testing for cargo security continued with the TSA. With the COVID-19 pandemic, all testing within the TSA was put on hold; however, we resumed cargo ~~non-detection~~ testing ~~resumed~~ during the summer of 2020, and we subsequently announced on September 9, 2020 that the TRACER 1000 passed the non-detection testing portion of the TSA’s ACSQT. Due to continued delays caused by COVID-19, TSA cargo detection testing ~~resumed during the fall of 2020 and continues to move forward. This~~is ongoing but proceeding much more slowly than anticipated. As a result, efforts are primarily focused on our other opportunities. TSA cargo detection testing is the ~~next and~~ final step to be listed on the Air Cargo Screening Technology List (“ACSTL”) as an “approved” ~~device and, if~~device. If approved, ~~thereby~~the TRACER 1000 will be approved for cargo sales in the United States. ~~Given the deterioration in air traffic caused by the pandemic, TSA certification testing for passenger checkpoint security was put on indefinite hold.~~

AgLAB, an exclusive licensee of ATI for the agriculture market, has developed the AgLAB-1000™ series of mass spectrometers for ~~process control and~~use in the ~~detection of trace levels of solvents~~hemp and ~~pesticides.~~cannabis market with initial focus on optimizing yields in the extraction and distillation process. The AgLAB product line is a derivative of ~~the Company’s~~our core AMS Technology. The AMS Technology provides a significant competitive advantage due to its small size, rugged design, quick analysis, and ease of ~~use,~~use. We continue to work with the market to refine our library and ~~affordability. These attributes are valuable for agriculture applications in both processing facilities and in the field.~~instrumentation.

BreathTech, an exclusive licensee of ATI for use in breath analysis, is developing the BreathTest-1000™, a breath analysis tool to screen for VOC metabolites found in a person’s breath that could indicate they may have an infection, including COVID-19 or pneumonia. While vaccines have been deployed to prevent the transmission of COVID-19, only a fraction of the world has been vaccinated and new variants continue to pose a significant and evolving threat. New tools to aid in the battle against COVID-19 remain of the utmost importance to help defeat the disease, and BreathTech, in conjunction with Cleveland Clinic, are developing a quick and easy to use device to help prevent the further spread of the disease.

Development of the BreathTest-1000 follows ~~the Company’s positive~~our results in pre-clinical trials for the BreathDetect-1000™, a rapid self-serve breathalyzer that ~~detects~~was designed to detect bacterial infections in the respiratory tract, including pneumonia. The pre-clinical trials were conducted in collaboration with UT Health San Antonio in 2017.

On ~~October 20, 2020, we~~February 1, 2022, BreathTech announced that it has hired Dr. Karim Sirgi, MD, MBA and FCAP as its Chief Science Officer. Dr. Sirgi is a ~~joint~~pathologist, board certified in Anatomic, Clinical and Cytopathology, and has over 30 years of practice and leadership experience in private and academic pathology practices. We expect Dr. Sirgi will be key in the research and development ~~agreement~~and regulatory efforts at BreathTech and will help lead our partnership with ~~the~~ Cleveland Clinic ~~Foundation (the “Cleveland Clinic”) to explore leveraging~~in the ~~BreathTest-1000 to rapidly screen for COVID-19 or related indicators. The goal~~development of the agreement is to develop a non-invasive device that will use breath samples to identify COVID-19 strains, with the potential to provide a low-cost, self-service screening option that could be deployed on a large-scale.

In March 2020, the World Health Organization declared COVID-19 a global pandemic.

We are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on our business is uncertain and difficult to predict, as the disease and the responses that we, other businesses, and governments are taking continue to evolve. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it isremains possible that it could cause a prolonged global economic recession. Policymakers around the globe have responded with fiscal policy actions to support the economy as a whole. The magnitude and overall effectiveness of these actions have been somewhat positive, but continuing actions remain ~~uncertain.~~uncertain and pose some degree of risk.

To date, we have seen delays with respect to the TSA certification process and parts of our supply chain, ~~as a result~~particularly the impact of ~~COVID-19.~~the global semiconductor and electronics shortage, which has now resulted in product pricing inflation. In addition, ~~with a reduction in~~although passenger demand for air travel ~~caused by~~has rebounded, the ~~pandemic, we are seeing a reduction in near-term demand for ETDs at checkpoints.~~

overall recovery of the airline industry and ancillary services remains highly uncertain and is dependent upon, among other things, the number of cases declining around the globe, public health impacts of

~~It is possible that~~new COVID-19 variants, the continued ~~spread~~administration of ~~COVID-19 could cause further disruption in~~vaccines to unvaccinated populations, and the duration of immunity granted by vaccines.

We continue to manage production, to secure alternative supplies, and to take other proactive actions. We believe that we will be able to pass the inflation caused by raw materials shortages and increased shipping costs to our ~~supply chain; cause delay, or limit~~customers by increasing the ~~ability of customers to perform, including in making timely payments to the Company; cause further delay in regulatory certification testing~~price of our ~~instruments;~~instruments. If supply chain shortages become more severe or longer term in nature, our business and results of operations could be adversely impacted; however, we do not expect this issue to materially adversely affect our liquidity position. The long-term impact ~~investment performance; and cause other unpredictable events. The extent to which~~of the COVID-19 pandemic on our business may innot be fully reflected until future periods.

We continue to evaluate the ~~future materially~~current and potential impact of the pandemic on our ~~financial condition, liquidity, or~~business, results of operations, ~~is uncertain.~~and consolidated financial statements. We also continue to actively monitor developments and business conditions that may cause us to take further actions that alter business operations as may be required by applicable authorities or that we determine are in the best interests of our employees, customers, suppliers, and stockholders.

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions are reviewed periodically. Actual results may differ from these estimates under different assumptions or conditions.

Three months ended ~~March~~December 31, 2021, compared to three months ended ~~March~~December 31, 2020:

Selected consolidated financial data for the quarters ended ~~March~~December 31, 2021, and 2020 is as follows:

	Three Months Ended March 31,						Three Months Ended December 31,
(In thousands)	2021			2020			2021			2020
Revenue	$	54		$	118		$	561		$	130
Cost of revenue		46			111			441			128
Gross profit		8			7			120			2
Gross margin		15	%		6	%		21	%		2	%
Operating expenses:
Selling, general and administrative		1,679			1,193			1,728			803
Research and development		669			814			652			758
Total operating expenses		2,348			2,007			2,380			1,561
Loss from operations		(2,340	)		(2,000	)		(2,260	)		(1,559	)
Interest and other expense, net		(63	)		(68	)
Other income and (expense), net								80			(63	)
Income tax benefit		—			—			—			—
Net loss	$	(2,403	)	$	(2,068	)	$	(2,180	)	$	(1,622	)

Revenue – Total revenue ~~decreased $64~~significantly increased by $431 thousand during the ~~third~~second quarter of fiscal ~~2021,~~2022, compared to the ~~third~~second quarter of fiscal ~~2020.~~2021. In the second quarter of fiscal 2022, revenue was comprised of sales related to our TRACER 1000 to an airport security checkpoint customer as well as to DHL (Deutsche Post AG). All of the revenue generated in the ~~third quarters~~second quarter of fiscal 2021 ~~and 2020~~ was related to ~~the~~ ~~sales of our TRACER 1000. The decrease in revenue was caused by pandemic-related delays in the delivery of certain microchips used in the production of our~~ TRACER 1000 ~~systems. This supply chain issue has since been resolved.~~sales to DHL (Deutsche Post AG).

Cost of Revenue – Gross profit is comprised of revenue less cost of revenue. In the ~~third~~second quarters of fiscal ~~2021~~2022 and ~~2020,~~2021, cost of revenue was comprised of labor, materials, shipping, and warranty reserve ~~and overhead~~ related to the sale of TRACER 1000 units. Cost of revenue increased $313 thousand during the second quarter of fiscal 2022, compared to the second quarter of fiscal 2021, due to the increase in revenue described above. Gross margin increased ~~to 15%~~by 19% in the ~~third~~second quarter fiscal ~~2021,~~2022, compared to the ~~third~~second quarter of fiscal ~~2020. We expect that gross margin will continue to improve~~2021, as we ~~increase~~have increased production and ~~benefit~~benefited from associated volume ~~discounts, and as~~discounts. Further, we ~~further refine~~have benefited from implementing specific enhancements to our technology.

Operating Expenses – Operating expenses increased ~~$341~~$819 thousand, or ~~17%~~52%, during the ~~third~~second quarter of fiscal ~~2021,~~2022, compared to the ~~third~~second quarter of fiscal ~~2020~~.2021. Significant changes to operating expenses include the following:

Selling, general and administrative increased $486 thousand, or 41%, due to payroll related expenses. The increase in operating expense was partially offset by a decrease in office rent and related expenses associated with the former corporate office. In addition, due to COVID-19, our expenses related to travel and conferences also declined.

Income Taxes –Income tax benefit did not change during the ~~third~~second quarter of fiscal ~~2021,~~2022, compared to the ~~third~~second quarter of fiscal ~~2020.~~2021. The realization of tax benefits depends on the existence of future taxable income. Pursuant to ~~ASC~~Accounting Standards Codification (“ASC”) 740 “Income Taxes”, a valuation allowance has been established on all of ~~the Company’s~~our deferred tax assets.

~~Nine~~Six months ended ~~March~~December 31, 2021, compared to ~~nine~~six months ended ~~March~~December 31, 2020:

Selected consolidated financial data for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 is as follows:

	Nine Months Ended March 31,						Six Months Ended December 31,
(In thousands)	2021			2020			2021			2020
Revenue	$	324		$	324		$	748		$	270
Cost of revenue		287			307			616			241
Gross profit		37			17			132			29
Gross margin		11	%		5	%		18	%		11	%
Operating expenses:
Selling, general and administrative		3,408			3,505			3,154			1,729
Research and development		2,036			2,608			1,291			1,367
Disposal of corporate lease		544			—			—			544
Total operating expenses		5,988			6,113			4,445			3,640
Loss from operations		(5,951	)		(6,096	)		(4,313	)		(3,611	)
Interest and other income, net		(185	)		(123	)
Other income and (expense), net								104			(122	)
Income tax benefit		—			—			—			—
Net loss	$	(6,136	)	$	(6,219	)	$	(4,209	)	$	(3,733	)

Revenue – Total revenue ~~remained unchanged~~increased $478 thousand during the ~~nine months ended March 31, 2021,~~fiscal year 2022, compared ~~to the nine months ended March 31, 2020. All~~fiscal year 2021. In fiscal year 2022, revenue was comprised of ~~the material revenue generated during each of the nine months ended March 31, 2021 and 2020 was from the~~ sales ofrelated to our TRACER 1000 ~~units.~~to an airport security checkpoint customer as well as to DHL (Deutsche Post AG). In fiscal year 2021, all of our revenue was related to the sales of the TRACER 1000 to DHL (Deutsche Post AG).

Cost of Revenue – Gross profit is comprised of revenue less cost of revenue. ~~During each of~~In the ~~nine~~six months ended ~~March~~December 31, 2021 and December 31, 2020, cost of revenue was comprised of labor, materials, ~~overhead,~~shipping, warranty reserve, and ~~shipping~~overhead allocation related to the ~~above sales.~~sale of TRACER 1000 units. Cost of revenue increased $375 thousand during fiscal year 2022, compared to fiscal year 2021, due to the increase in revenue described above. Gross margin increased by 7% in the fiscal year 2022, compared to ~~11%~~the fiscal year 2021, as we have increased production and benefited from associated volume discounts. Further, we have benefited from implementing specific enhancements to our technology.

Operating Expenses – Operating expenses increased $805 thousand, or 22% during the ~~nine~~six months ended ~~March~~December 31, 2021, compared to ~~the nine~~six months ended ~~March~~December 31, ~~2020, as the margin in the prior period was driven by the FIFO inventory methodology where much of the inventory used to build the TRACER 1000 had R&D volume pricing.~~ ~~We expect that gross margin will continue to improve as we increase production and benefit from associated volume discounts, and as we further refine our technology.~~

~~Operating Expenses~~ ~~– Operating expenses decreased $125 thousand, or 2%, during the nine months ended March 31, 2021, compared to the nine months ended March 31,~~ 2020.Significant changes to operating expenses include the following:

Income Taxes –Income tax benefit did not change during the ~~nine~~six months ended ~~March~~December 31, 2021, compared to the ~~nine~~six months ended ~~March~~December 31, 2020. The realization of tax benefits depends on the existence of future taxable income. Pursuant to ASC 740 “Income Taxes”, a valuation allowance has been established on all of ~~the Company’s~~our deferred tax assets.

	Nine Months Ended March 31,									Six Months Ended December 31,
(In thousands)	2021			2020			Change			2021			2020			Change
Change in cash and cash equivalents:
Net cash used in operating activities	$	(4,864	)	$	(4,956	)	$	92		$	(3,484	)	$	(2,492	)	$	(992	)
Net cash used in investing activities		(24	)		—			(24	)		(264	)		(16	)		(248	)
Net cash provided by financing activities		33,555			8,150			25,405
Net cash (used in) provided by financing activities											(2,018	)		21,822			(23,840	)
Net change in cash and cash equivalents	$	28,667		$	3,194		$	25,473		$	(5,766	)	$	19,314		$	(25,080	)

As of ~~March~~December 31, 2021, we held cash and cash equivalents ~~and restricted cash~~ of ~~$32.0~~$30.2 million, and our working capital was approximately ~~$28.3~~$56.9 million. As of June 30, ~~2020,~~2021, we had cash and cash equivalents of ~~$3.3~~$35.9 million, and our working capital was approximately ~~$0.3~~$60.9 million. Cash and cash equivalents ~~increased $28.7~~decreased $5.8 million as of ~~March~~December 31, 2021, compared to June 30, ~~2020,~~2021, due to ~~public offerings~~the partial repayment of ~~our common stock with net proceeds of approximately $33.5 million, partially offset by funding our normal~~the related party notes including accrued interest as well as continuing operating ~~activities and research and development initiatives.~~expenses.

Cash used in operating activities ~~decreased $0.1~~increased $1.0 million for the ~~nine~~six months ended ~~March~~December 31, 2021, compared to the ~~nine~~six months ended ~~March~~December 31, 2020, ~~primarily~~ due to ~~a reduction~~an increase in ~~our expenses as well as~~accounts receivable from sales of the TRACER 1000, receipt of an alternative minimum tax credit in the prior period, and a decrease in accounts ~~receivable from receiving the remaining alternative minimum tax (“AMT”) credit, partially offset by an increase in accrued liabilities related to payroll expenses.~~payable.

Cash used in investing activities increased ~~$24~~$248 thousand for the ~~nine~~six months ended ~~March~~December 31, 2021, compared to the ~~nine~~six months ended ~~March~~December 31, 2020, due to ~~purchases~~the addition of ~~equipment.~~leasehold improvement assets related to our new R&D facility in Austin.

Cash used in financing activities was $2.0 million for the six months ended December 31, 2021, compared to cash provided by financing activities ~~increased $25.4~~of $21.8 million for the ~~nine~~six months ended ~~March~~December 31, ~~2021,~~2020. This change was due to the partial repayment of the related party notes during the current period, compared to the ~~nine months ended March 31, 2020. During the nine months ended March 31, 2021, we raised~~ net proceeds from sale of common stock of ~~approximately $33.5 million. By comparison, during~~$21.8 million in the ~~nine months ended March 31, 2020, we raised funding through a note payable from a related party for net proceeds of $2.5 million, the sale of shares of common stock through an “at the~~ market offering” program for net proceeds of approximately $1.2 million, and the sale of shares of common stock in two separate registered direct offerings for net proceeds of approximately $4.5 million.prior period.

~~Our annual report on Form 10-K for~~Historically, our primary uses of cash have been to fund research and development, inventory, and selling, general and administrative expenses. During the fiscal year ~~ended June 30, 2020 indicated substantial doubt as to our ability to continue as a going concern. During the first three quarters of fiscal~~ 2021, we ~~have~~ successfully completed several public offerings of our common stock, raising net proceeds of approximately ~~$33.5~~$67.6 million. ~~We believe this solves our liquidity issue, and we no longer have substantial doubt about our ability to continue as a going concern.~~ We will continue to evaluate opportunities to further strengthen our liquidity, including selling the Company or a portion thereof, licensing some of our technology, raising additional funds through the capital markets, debt financing, equity financing, merging, or engaging in a strategic partnership. However, our ability to successfully effectuate any such transactions depends on operating and economic conditions, some of which are beyond our control. If additional capital is needed, we may not be able to obtain debt or equity financing on terms favorable to us, or at all. Based on current expectations, we believe we have sufficient liquidity to meet our cash flow needs during this fiscal year 2022 and the immediate future.

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are more likely than not to be realized. As of March 31, 2021, the Company established a valuation allowance against all of its net deferred tax assets.

For the three months ended March 31, 2021 and 2020, the Company incurred pre-tax losses in the amount of $2.4 million and $2.1 million, respectively. For the nine months ended March 31, 2021 and 2020, the Company incurred pre-tax losses in the amount of $6.1 million and $6.2 million, respectively.

The CARES Act was signed into law on March 27, 2020. The CARES Act provided certain tax relief measures including the acceleration of the AMT credit previously paid. The CARES Act allows for the acceleration of the refundable AMT credit up to 100% of the AMT credit. In response to the impact of the CARES Act, the Company received the remaining AMT credit of $429 thousand for AMT previously paid during the three months ended September 30, 2020.

~~The Company’s~~Our effective tax rate is 0% for income tax for the ~~nine~~six months ended ~~March~~December 31, 2021, and ~~the Company expects~~we expect that ~~its~~our effective tax rate for the full fiscal year ~~2021~~2022 year will be 0%. Based on the weight of available evidence, including net cumulative losses ~~since inception~~ and expected future losses, ~~the Company has~~we have determined that it is more likely than not that ~~its~~our U.S. federal and state deferred tax assets will not be realized and therefore a full valuation allowance has been provided on the U.S. federal and state net deferred tax assets.

In general, if ~~the Company experiences~~we experience a greater than 50 percentage point aggregate change in ownership over a three-year period (a Section 382 ownership change), utilization of its pre-change net operating loss (“NOL”) carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code. Generally, U.S. state laws have laws similar to Internal Revenue Code Section 382. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforward before utilization.

We file U.S. federal and state income tax returns. ~~The Company is~~We are not currently subject to any income tax examinations. ~~Since the Company’s inception, the Company had incurred losses from its U.S. operations,~~Dating back to June 2002, we have net operating loss carryovers, which generally allows all tax years to remain open to income tax examinations for all years for which there are loss carryforwards.

~~The Company recognizes~~We recognize the financial statement effects of a tax position when it becomes more likely than not, based upon the technical merits, that the position will be sustained upon examination. We currently have approximately $300 thousand of uncertain tax positions as of December 31, 2021, all of which are accounted as contra-deferred tax assets. The Company ~~currently has no unrecognized tax benefits and~~ does not expect any ~~material~~significant changes to its uncertain tax positions in the ~~next~~coming 12 ~~months in unrecognized tax benefits.~~months.

There is $0 provision for income taxes during each of the three and ~~nine~~six months ended ~~March~~December 31, ~~2021. There was $0 provision for income taxes during the three~~2021 and ~~nine months ended March 31,~~ 2020.

We did not have any off-balance sheet arrangements as of ~~March~~December 31, 2021, or June 30, ~~2020.~~2021.

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the period covered by this Quarterly Report. Based on the evaluation and criteria of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ~~effective.~~effective at the reasonable assurance level.

There was no change in our internal control over financial reporting during ~~the nine months~~our last fiscal quarter ended ~~March~~December 31, 2021 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Further information regarding the Stein Action and the Section 205 Action is provided in the Schedule 14A proxy statement amendment and supplement filed by the Company with the Securities and Exchange Commission on April 29, 2021.

Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our Form 10-K and our Form 10-Qs, the occurrence of any one of which could have a material adverse effect on our actual results.

There have been no material changes to the Risk Factors previously disclosed in our fiscal year ~~2020~~2021 Form ~~10-K and Quarterly Reports on Form 10-Q for the quarters ended September 30, 2020 and December 31, 2020.~~10-K.

On February 16, 2021, the Company issued the Placement Agent Warrants to the Placement Agent. The Placement Agent Warrants and the shares of Common Stock underlying the Placement Agent Warrants have not been registered under the Securities Act and were issued in reliance on an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) thereof.None.

Exhibit No.	Description	Incorporation by Reference
~~4.1~~
3.1	~~Form~~Certificate of ~~Placement Agent’s Warrant~~Incorporation, as filed with the Secretary of State of the State of Delaware.	Exhibit ~~4.1~~3.1 to Form 8-K filed on ~~February 16, 2021.~~December 28, 2017.

~~10.1~~3.2	Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant’s Form of8-K filed with the Securities ~~Purchase Agreement~~and Exchange Commission on December 28, 2017).	Exhibit ~~10.1~~3.2 to Form 8-K filed on ~~February 16, 2021.~~December 28, 2017.

~~10.2~~3.3	~~Letter~~Certificate of ~~Agreement, dated March 24, 2021~~Designations of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of the State of Delaware.	Exhibit ~~10.1~~3.3 to Form 8-K filed on ~~March 30, 2021.~~

~~31.1~~	~~Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.~~	~~Filed herewith.~~December 28, 2017.

~~31.2~~3.4	~~Certification~~Certificate of ~~Chief Financial Officer pursuant to Rule 13a-14(a)~~Designations of Series C Convertible Preferred Stock, as filed with the ~~Securities Exchange Act~~Delaware Secretary of ~~1934.~~State on April 17, 2019.	~~Filed herewith.~~Exhibit 3.1 to Form 8-K filed on April 23, 2019.

~~32.1~~3.5	~~Certification pursuant to Rule 13a-14(b)~~Certificate of Designations of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, as filed with the ~~Securities Exchange Act~~Delaware Secretary of ~~1934.~~State on April 17, 2019.	~~Filed herewith.~~Exhibit 3.2 to Form 8-K filed on April 23, 2019.

~~101~~3.6	Certificate of Amendment to the Certificate of Incorporation of Astrotech Corporation.	Exhibit 3.1 to Form 8-K filed on July 1, 2020.

3.7	Certificate of Amendment to the Certificate of Incorporation of Astrotech Corporation.	Exhibit 3.1 to Form 8-K filed on October 12, 2021.

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.	Filed herewith.

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.	Filed herewith.

32.1	Certification pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.	Furnished herewith.

101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	Filed herewith.

101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.

104	The ~~following financial information~~cover page from the Company’s Quarterly Report on Form 10-Q for the ~~period~~quarter ended ~~March~~December 31, 2021, has been formatted in eXtensible Business Reporting Language: (i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations, (iii) Unaudited Condensed Consolidated Statements of Cash Flows, (iv) Notes to Unaudited Condensed Consolidated Financial Statements.Inline XBRL.	~~Filed herewith.~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		91-1273737
State or Other Jurisdiction of Incorporation or Organization		I.R.S. Employer Identification No.

2105 Donley Drive, Suite 100, Austin, Texas		78758
Address of Principal Executive Offices		Zip Code

		Page
PART I:	FINANCIAL INFORMATION	3

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 4.	CONTROLS AND PROCEDURES	23

PART II:	OTHER INFORMATION	24

ITEM 1.	LEGAL PROCEEDINGS	24
ITEM 1A.	RISK FACTORS	24
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	24
ITEM 4.	MINE SAFETY DISCLOSURES	24
ITEM 5.	OTHER INFORMATION	24
ITEM 6.	EXHIBITS	25

	December 31, 2021
Available-for-Sale	Adjusted		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gain		Loss			Value
Mutual Funds - Corporate & Government Debt	$	19,998	$	0	$	(179	)	$	19,819
ETFs - Corporate & Government Debt		7,376		0		(89	)		7,287
Total	$	27,374	$	0	$	(268	)	$	27,106

	June 30, 2021
Available-for-Sale	Adjusted		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gain		Loss			Value
Mutual Funds - Corporate & Government Debt	$	19,998	$	0	$	(13	)	$	19,985
ETFs - Corporate & Government Debt		7,376		0		(10	)		7,366
Total	$	27,374	$	0	$	(23	)	$	27,351

Range of exercise prices	Number Outstanding		Options Outstanding Weighted- Average Remaining Contractual Life (years)		Weighted- Average Exercise Price		Number Exercisable		Options Exercisable Weighted- Average Exercise Price
$1.85 – 3.55		76,300		2.03	$	3.43		69,634	$	3.35
$5.00 – 5.85		164,725		7.29		5.43		113,203		5.49
$6.00 – 8.35		130,000		3.65		7.19		86,000		6.59
$1.85 – 8.35		371,025		4.93	$	5.59		268,837	$	5.29

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑☒	Smaller reporting company	☑☒
Emerging growth company	☐

	December 31, 2021
Available-for-Sale	Carrying		Fair Value Measured Using						Fair
(In thousands)	Amount		Level 1		Level 2		Level 3		Value
Mutual Funds - Corporate & Government Debt	$	19,819	$	19,819	$	—	$	—	$	19,819
ETFs - Corporate & Government Debt		7,287		7,287		—		—		7,287
Total	$	27,106	$	27,106	$	—	$	—	$	27,106

	June 30, 2021
Available-for-Sale	Carrying		Fair Value Measured Using						Fair
(In thousands)	Amount		Level 1		Level 2		Level 3		Value
Mutual Funds - Corporate & Government Debt	$	19,985	$	19,985	$	—	$	—	$	19,985
ETFs - Corporate & Government Debt		7,366		7,366		—		—		7,366
Total	$	27,351	$	27,351	$	—	$	—	$	27,351

Range of exercise prices	Number Outstanding (In thousands)		Options Outstanding Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price		Number Exercisable (In thousands)		Options Exercisable Weighted- Average Exercise Price
$1.85 – 2.83		13		6.74	$	2.08		10	$	2.15
$5.00 – 5.85		88		5.36		5.55		88		5.55
$6.00 – 6.00		52		0.64		6.00		52		6.00
$1.85 – 6.00		153		3.87	$	5.41		150	$	5.49

	Three Months Ended March 31, 2021							Three Months Ended March 31, 2020
(In thousands)	Revenue		Depreciation		Loss before Income Taxes			Revenue		Depreciation		Loss before Income Taxes
1st Detect	$	54	$	12	$	(1,322	)	$	118	$	48	$	(2,068	)
AgLAB		—		—		(1,081	)		—		—		—
Total	$	54	$	12	$	(2,403	)	$	118	$	48	$	(2,068	)

	Nine Months Ended March 31, 2021							Nine Months Ended March 31, 2020
(In thousands)	Revenue		Depreciation		Loss before Income Taxes			Revenue		Depreciation		Loss before Income Taxes
1st Detect	$	324	$	48	$	(3,563	)	$	324	$	189	$	(6,219	)
AgLAB		—		—		(2,573	)		—		—		—
Total	$	324	$	48	$	(6,136	)	$	324	$	189	$	(6,219	)

		Astrotech Corporation



Date: ~~May~~February 14, ~~2021~~2022		/s/ Eric Stober
		Eric Stober
		Chief Financial Officer and Principal Accounting Officer

Weighted-average remaining lease term (years):

Operating leases

~~0.1~~2.4

Financing leases

~~3.9~~3.0

Weighted-average discount rate:

Operating leases

~~11.0~~6.4

Financing leases

~~6.2~~5.3