bioAffinity Technologies, Inc.

Previous wording

Our diagnostic test, CyPath® Lung, addresses the need for noninvasive detection of early-stage lung cancer. Lung cancer is the leading cause of cancer-related deaths worldwide. Physicians order CyPath® Lung to assist in their assessment of patients who are at high risk for lung cancer. The CyPath® Lung test enables physicians to more confidently identify patients who will likely benefit from timely intervention and more invasive follow-up procedures and those who are likely without lung cancer and should continue screening in accordance with guidelines. CyPath® Lung has the potential to increase overall diagnostic accuracy of lung cancer, which could lead to increased survival, fewer unnecessary invasive procedures, reduced patient anxiety, and lower medical costs.

Current wording

Our diagnostic test, CyPath® Lung, addresses the need for noninvasive detection of early-stage lung cancer. Lung cancer is the leading cause of cancer-related deaths worldwide. Physicians order CyPath® Lung to assist in their assessment of patients who are at high risk for lung cancer. The CyPath® Lung test enables physicians to more confidently identify patients who will likely benefit from timely intervention and more invasive follow-up procedures and those who are likely without lung cancer and should continue routine screening. CyPath® Lung has the potential to increase overall diagnostic accuracy of lung cancer, which could lead to increased survival, fewer unnecessary invasive procedures, reduced patient anxiety, and lower medical costs.

Previous wording

Commercial laboratory services, including CyPath® Lung, are performed at our wholly owned subsidiary PPLS which we acquired by purchasing the assets of Village Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, that included the CAP-accredited and CLIA-certified commercial laboratory it owned. We own and operate the clinical anatomic and clinical pathology laboratory. CyPath® Lung is offered for sale to physicians by PPLS.

Current wording

Commercial laboratory services, including CyPath® Lung, are performed at our wholly owned subsidiary PPLS which we acquired by purchasing the assets of Village Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, that included the CAP-accredited and CLIA-certified commercial laboratory it owned. We now own and operate the clinical anatomic and clinical pathology laboratory. CyPath® Lung is offered for sale to physicians by PPLS.

Previous wording

Through our wholly owned subsidiary, OncoSelect® Therapeutics, LLC, we have conducted research that has led to discoveries and advancement of novel cancer therapeutic approaches that specifically and selectively target cancer cells. We continue to advance research and development for use of this technology for topical treatment of squamous cell skin cancer. We expect to present our findings at conferences and publish our research in peer-reviewed journals in the near future. We intend to seek strategic partners to develop our therapeutic discoveries which could result in broad-spectrum cancer treatments in the future.

Current wording

Through our wholly owned subsidiary, OncoSelect® Therapeutics, LLC, we have conducted research that has led to discoveries and advancement of novel cancer therapeutic approaches that specifically and selectively target cancer cells. We expect to present our findings at conferences and publish our research in the near future. We intend to seek strategic partners to develop our therapeutic discoveries which could result in broad-spectrum cancer treatments in the future.

Previous wording

Key financial results for the nine months ended September 30, 2025, include:

Current wording

Key financial results for the three months ended March 31, 2026, include:

Previous wording

To date, we have devoted a substantial portion of our efforts and financial resources to the development of our diagnostic test, CyPath®Lung. As a result, since our inception in 2014, we have funded our operations principally through private and public sales of our equity. As of September 30, 2025, we had cash and cash equivalents of $7.7 million. As of October 29, 2025, we had cash and cash equivalents of $8.4 million, which we expect will support our operations through May 2026. We have incurred significant losses and negative cash flows from operations since inception and expect to continue to incur losses and negative cash flows for the foreseeable future. Based on the Company’s current expected level of operating expenditures and the cash and cash equivalents on hand at September 30, 2025, management concludes that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying condensed consolidated financial statements.

Current wording

To date, we have devoted a substantial portion of our efforts and financial resources to the development of our diagnostic test, CyPath®Lung. As a result, since our inception in 2014, we have funded our operations principally through private and public sales of our equity, issuance of debt, and the exercise of outstanding warrants and stock options. As of March 31, 2026, we had cash and cash equivalents of $3.0 million. As of May 4, 2026, we had cash and cash equivalents of $1.7 million, which we expect will support our operations through June 2026. We have incurred significant losses and negative cash flows from operations since inception and expect to continue to incur losses and negative cash flows for the foreseeable future. Based on the Company’s current expected level of operating expenditures and the cash and cash equivalents on hand at March 31, 2026, management concludes that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying condensed consolidated financial statements.

Previous wording

Prior to acquisition of the clinical pathology laboratory by PPLS, Village Oaks, under the trade name Precision Pathology Services, had licensed and developed CyPath® Lung as a laboratory developed test (“LDT”) for sale to physicians. The license agreement provided that revenues from the sale would be split evenly between the Company and Village Oaks. In the second quarter of 2022, prior to the acquisition, we started to recognize revenue as part of a limited beta market testing program of the CyPath®Lung test. We have never been profitable, and as of September 30, 2025, we had a working capital of approximately $6.3 million and an accumulated deficit of approximately $65.4 million. We expect to continue to incur significant operating losses for the foreseeable future as we continue the development of our diagnostic tests and advance our diagnostic tests through clinical trials.

Current wording

Prior to acquisition of the clinical pathology laboratory by PPLS, Village Oaks, under the trade name Precision Pathology Services, had licensed and developed CyPath® Lung as a laboratory developed test (“LDT”) for sale to physicians. The license agreement provided that revenues from the sale would be split evenly between the Company and Village Oaks. In the second quarter of 2022, prior to the acquisition, we started to recognize revenue as part of a limited beta market testing program of the CyPath®Lung test. We have never been profitable, and as of March 31, 2026, we had a working capital of approximately $1.2 million and an accumulated deficit of approximately $72.2 million. We expect to continue to incur significant operating losses for the foreseeable future as we continue the development of our diagnostic tests and advance our diagnostic tests through clinical trials.

Previous wording

Net loss for the three months ended September 30, 2025, was approximately $5.1 million, compared to a net loss of approximately $2.0 million for the three months ended September 30, 2024.

Current wording

Net loss for the three months ended March 31, 2026, was approximately $3.6 million, compared to a net loss of approximately $2.7 million for the three months ended March 31, 2025.

Previous wording

Since acquisition of the clinical pathology laboratory on September 19, 2023, additional revenue streams have been consolidated. PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. The Company recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered.

Current wording

PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. The Company recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered.

Previous wording

1 Patient services fees include direct billing for CyPath® Lung diagnostic tests as well as anatomical tests and pathology services unrelated to CyPath® Lung including services discontinued due to unprofitability.

Current wording

1 Patient services fees include direct billing for CyPath® Lung diagnostic test of approximately $361,000 and $169,000 for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Operating expenses totaled approximately $3.7 million and $4.3 million during the three months ended September 30, 2025 and 2024, respectively. The decrease in operating expenses is the result of the following factors:

Current wording

Operating expenses totaled approximately $5.0 million and $4.5 million for the three months ended March 31, 2026 and 2025, respectively. The increase in operating expenses is the result of the following factors:

Previous wording

Our direct costs and expenses are primarily direct labor for pathology services, laboratory supplies and reagents, laboratory equipment, and allocated shared facilities. Direct costs and expenses totaled $0.9 million and $1.4 million during the three months ended September 30, 2025 and 2024, respectively. The decrease of approximately $0.5 million for 2025 compared to 2024 was primarily attributable to the targeted strategic actions which occurred in March 2025, aimed at streamlining operations and reducing costs related to our lab operations.

Current wording

Our direct costs and expenses are primarily direct labor for pathology services, laboratory supplies and reagents, laboratory equipment, and allocated shared facilities. Direct costs and expenses totaled $0.9 million and $1.4 million during the three months ended March 31, 2026 and 2025, respectively. The decrease of approximately $439,000, or 32%, for 2026 compared to 2025 was primarily attributable to the targeted strategic actions which occurred in March 2025, aimed at streamlining operations and reducing costs related to our lab operations.

Previous wording

Research and development expenses totaled $1.0 million and $1.1 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease of approximately $0.1 million, or 6%, for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to a decrease in compensation costs and benefits and lab supplies.

Current wording

Research and development expenses totaled approximately $349,000 and $367,000 for the three months ended March 31, 2026 and 2025, respectively. The decrease of $18,000, or 5%, for the three months ended March 31, 2026, compared to the same period in 2025 was primarily attributable to a decrease in compensation costs and benefits and lab supplies.

Previous wording

Clinical development expenses totaled approximately $143,000 and $94,000 for the three months ended September 30, 2025 and 2024, respectively. The increase of approximately $49,000, or 53%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to an increase in professional fees in 2025 related to managing our clinical strategy for our pivotal clinical trial.

Current wording

Clinical development expenses totaled approximately $334,000 and $138,000 for the three months ended March 31, 2026 and 2025, respectively. The increase of $196,000, or 141%, for the three months ended March 31, 2026, compared to the same period in 2025 was primarily attributable to beginning our pivotal clinical trial.

Previous wording

Selling, general and administrative expenses totaled approximately $2.2 million and $2.4 million for the three months ended September 30, 2025 and 2024, respectively. The decrease of approximately $0.2 million, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to a decrease in general and administrative costs related to lab operations as a result of our targeted strategic actions which occurred in March 2025, aimed at streamlining operations and reducing costs. These decreases were partially offset by an increase in employee compensation related to the addition of additional personnel and support services to support sales of our diagnostic test, CyPath® Lung.

Current wording

Selling, general and administrative expenses totaled approximately $3.2 million and $2.5 million for the three months ended March 31, 2026 and 2025, respectively. The increase of approximately 790,000, or 32%, for the three months ended March 31, 2026, compared to the same period in 2025 was primarily attributable an increase in employee compensation related to administrative and sales due to additional personnel and support services to support the growth of sales of our diagnostic test, CyPath® Lung.

Previous wording

Depreciation and amortization expenses totaled approximately $113,000 and $151,000 for the three months ended September 30, 2025 and 2024, respectively. The decrease of approximately $38,000, or 25%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to the termination of a financing lease in April 2025 due to the Company’s targeted strategic actions announced in March, 2025.

Current wording

Depreciation and amortization expenses totaled $115,000 and $155,000 for the three months ended March 31, 2026 and 2025, respectively. The decrease of approximately 40,000, or 26%, for the three months ended March 31, 2026, compared to the same period in 2025 was primarily attributable to the termination of a financing lease in April 2025 due to the Company’s targeted strategic actions announced in March 2025.

Previous wording

To date, we have funded our operations primarily through our IPO, exercise of stock options and warrants, and the sale of our securities, resulting in gross proceeds of approximately $58.2 million. We have evaluated whether there are conditions and events that raise substantial doubt about our ability to continue as a going concern for at least one year after the date the condensed consolidated financial statements are issued.

Current wording

To date, we have funded our operations primarily from the private and public sales of our equity, exercise of stock options and warrants, and the issuance of debt, resulting in gross proceeds of approximately $58.2 million. We have evaluated whether there are conditions and events that raise substantial doubt about our ability to continue as a going concern for at least one year after the date the condensed consolidated financial statements are issued.

Previous wording

We have incurred losses since our inception in 2014 as a result of significant expenditures for operations and research and development and, prior to April 2022, the lack of any approved diagnostic test or therapeutic products to generate revenue. For the nine months ended September 30, 2025 and 2024, we had net losses of $11.8 million and $6.1 million, respectively, and we expect to incur substantial additional losses in future periods. We have an accumulated deficit of approximately $65.4 million as of September 30, 2025. Despite our recent financing in the third quarter of 2025 in which we raised gross proceeds of $10.4 million, we believe our current cash and anticipated revenue from operations will be sufficient to support our operations through May 2026. Based on our current expected level of operating expenditures, current expected levels of revenue, and the cash and cash equivalents on hand at September 30, 2025, of $7.7 million, management concludes that there is substantial doubt about our ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report. We need to raise further capital through the sale of additional equity or debt securities or other debt instruments, strategic relationships or grants, or through exercised outstanding warrants to support our future operations unless our revenue increases significantly. Our business plan includes expansion for our commercialization efforts which will require additional funding. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives.

Current wording

We have incurred losses since our inception in 2014 as a result of significant expenditures for operations and research and development and, prior to April 2022, the lack of any approved diagnostic test or therapeutic products to generate revenue. For the three months ended March 31, 2026 and 2025, we had net losses of $3.6 million and $2.7 million, respectively, and we expect to incur substantial additional losses in future periods. We have an accumulated deficit of approximately $72.2 million as of March 31, 2026. Despite our recent financing in 2025, we believe our current cash and anticipated revenue from operations will be sufficient to support our operations through June 2026. Based on our current expected level of operating expenditures, current expected levels of revenue, and the cash and cash equivalents on hand at March 31, 2026, of $3.0 million, management concludes that there is substantial doubt about our ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report. We need to raise further capital through the sale of additional equity or debt securities or other debt instruments, strategic relationships or grants, or through exercised outstanding warrants to support our future operations unless our revenue increases significantly. Our business plan includes expansion for our commercialization efforts which will require additional funding. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives.

Previous wording

Net cash used in operating activities was approximately $6.8 million and $5.6 million for the nine months ended September 30, 2025 and 2024, respectively. The increase of approximately $1.2 million in cash used by operations during the nine months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to an increase of $5.7 million in our loss from operations, a decrease in accounts payable and accrued expenses by $0.4 million offset by a decrease in accounts receivable by $1.2 million compared to the prior year, and a fair value adjustment to the warrant liability by $3.8 million related to the May 2025 warrant agreement.

Current wording

Net cash used in operating activities was approximately $3.2 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively. The increase of approximately $1.6 million in cash used by operations during the three months ended March 31, 2026, compared to the same period in 2025 was primarily attributable to an increase of approximately $970,000 in our loss from operations, a decrease of approximately $352,000 related to stock compensation and depreciation and amortization, an increase in patient accounts receivables of approximately $318,000, offset by an increase of approximately $20,000 in accounts payable and accrued expenses.

Previous wording

We used approximately $60,000 for the nine months ended September 30, 2025, in investing activities related primarily to purchase of computer and lab equipment, compared to approximately $80,000 used in investing activities for the nine months ended September 30, 2024.

Current wording

We used approximately $6,000 for the three months ended March 31, 2026, in investing activities related primarily to the purchase of computer and laboratory equipment, compared to $51,000 used in investing activities for the three months ended March 31, 2025.

Previous wording

Cash provided in financing activities was approximately $13.4 million compared to cash provided by financing activities of approximately $3.6 million for the nine months ended September 30, 2025 and 2024, respectively. The change in proceeds from prior year was primarily related to net proceeds from the equity transactions of $13.7 million offset by payments for loans and finance leases of $0.3 million, compared to the prior year of equity transactions of $3.6 million offset by payments for loans and finance leases of approximately $18,000.

Current wording

Net Cash Used in Financing Activities

Previous wording

Net Cash Provided by Financing Activities

Current wording

Cash used in financing activities was approximately $0.1 million compared to cash provided by financing activities of approximately $1.0 million for the three months ended March 31, 2026 and 2025, respectively. The change is primarily attributable to the additional capital raised during the first quarter of 2025 compared to no capital raises in the first quarter of 2026.

Previous wording

We enter into contracts in the normal course of business with third-party contract organizations for clinical trials and other services and products used for research and development and operating purposes. These contracts generally provide for termination following a certain period after notice, and therefore we believe that any non-cancellable obligations under these agreements are not material.

Current wording

We enter into contracts in the normal course of business with third-party contract organizations for clinical trials and other services and products used for research and development and operating purposes. These contracts generally provide for termination following a certain period after notice, and therefore we believe that any non-cancelable obligations under these agreements are not material.

Previous wording

We follow accounting considerations of Current Expected Credit Loss (“CECL”) -Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. With the acquisition of PPLS and control of Village Oaks, the Company’s board-certified pathologists provide anatomic and clinical pathology services for patients and other customers. The Company’s other customer types include contract research organizations (“CROs”), hospitals, and independent laboratories. The majority of the Company’s revenues stem from fees for services provided to patients, and thus in those arrangements, the patient is the customer, although the services may be requested by a physician on the patient’s behalf. Furthermore, in addition to its contracts with patients, the Company separately contracts with third-party payors (insurance companies and governmental payors), who are typically responsible for all or the majority of the fees agreed upon for such services provided to patients. Historically, material amounts of gross charges are not collected due to various agreements with insurance companies, capped pricing levels for government payors, and uncollectible balances from individual payors. To estimate these allowances of credit losses, the Company assesses the portfolio risk segments and historical data on collection rates. These estimated allowances offset patient revenues and accounts receivables.

Current wording

We follow accounting considerations of CECL -Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. With the acquisition of PPLS and control of Village Oaks, the Company’s board-certified pathologists provide anatomic and clinical pathology services for patients and other customers. The Company’s other customer types include contract research organizations (“CRO’s), hospitals, and independent laboratories. The majority of the Company’s revenues stem from fees for services provided to patients, and thus, in those arrangements, the patient is the customer, although the services may be requested by a physician on the patient’s behalf. Furthermore, in addition to its contracts with patients, the Company separately contracts with third-party payors (insurance companies and governmental payors), who are typically responsible for all or the majority of the fees agreed upon for such services provided to patients. Historically, material amounts of gross charges are not collected due to various agreements with insurance companies, capped pricing levels for government payors and uncollectible balances from individual payers. To estimate these allowances of credit losses, the Company assesses the portfolio risk segments and historical data on collection rates. These estimated allowances offset patient revenues and accounts receivables.

Previous wording

We follow ASC 842,Leases. In February 2016, the FASB issued Topic ASC 842, under which a lessee is required to recognize most leases on its balance sheet. We have elected to apply a third-party valuation incremental borrowing rate (“IBR”) as the discount rate by class of underlying assets when the rate is not implicit in the lease.

Current wording

We followLeases(“ASC 842”). In February 2016, the FASB issued Topic ASC 842, under which a lessee is required to recognize most leases on its balance sheet. The Company has elected to apply a third-party valuation incremental borrowing rate (“IBR”) as the discount rate by class of underlying assets when the rate is not implicit in the lease.

Previous wording

We follow ASC 718,Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors, and non-employees based on estimated fair values. We have used the Black-Scholes option pricing model to estimate grant date fair value for all option grants. The assumptions we use in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Since we use different assumptions based on a change in factors, our stock-based compensation expense could be materially different in the future.

Current wording

We follow ASC 718,Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors, and non-employees based on estimated fair values. We have used the Black-Scholes option pricing model to estimate grant date fair value for all option grants. The assumptions we use in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As such, as we use different assumptions based on a change in factors, our stock-based compensation expense could be materially different in the future.

Previous wording

We are governed by U.S. income tax laws, which are administered by the Internal Revenue Service. We follow ASC 740,Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible.

Current wording

We are governed by U.S. income tax laws, which are administered by the Internal Revenue Service (“IRS”). We follow ASC 740,Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible.

Previous wording

Our evaluation of our ability to continue as a going concern requires us to evaluate our future sources and uses of cash sufficient to fund our currently expected operations and research and development activities one year from the date our consolidated financial statements are issued. We evaluate the probability associated with each source and use of cash resources in making our going concern determination. The research and development of our diagnostic tests and therapeutic products are inherently subject to uncertainty.

Current wording

Our evaluation of our ability to continue as a going concern requires us to evaluate our future sources and uses of cash sufficient to fund our currently expected operations in conducting research and development activities one year from the date our consolidated financial statements are issued. We evaluate the probability associated with each source and use of cash resources in making our going concern determination. The research and development of our diagnostic tests and therapeutic products are inherently subject to uncertainty.