bioAffinity Technologies, Inc.

Previous wording

Data as of and for the three months ended March 31, 2026 and 2025, has been derived from our unaudited condensed consolidated financial statements appearing at the beginning of this Quarterly Report. Results for any interim period should not be construed as an inference of what our results would be for any full fiscal year or future period.

Current wording

Data as of and for the three and six months ended June 30, 2026 and 2025, has been derived from our unaudited condensed consolidated financial statements appearing at the beginning of this Quarterly Report. Results for any interim period should not be construed as an inference of what our results would be for any full fiscal year or future period.

Previous wording

We develop noninvasive diagnostics to detect early-stage lung cancer and other diseases of the lung using flow cytometry and automated analysis developed by machine learning, a form of AI. One of our diagnostic tests analyzes cell populations, including cancer and cancer-related cells, that are indicative of a specific diseased state.

Current wording

We develop noninvasive diagnostics to detect early-stage lung cancer and other diseases of the lung using flow cytometry and automated analysis developed by machine learning, a form of AI. Our commercial test, CyPath® Lung, is a noninvasive diagnostic that analyzes sputum using flow cytometry and automated analysis built with machine learning. Building on this proprietary platform, the Company is developing noninvasive tests to quantify lung inflammation with the aim of commercializing precision diagnostics to assist physicians when determining the most effective drug to prescribe patients with asthma and COPD. bioAffinity Technologies also is advancing its proprietary therapeutic discoveries, focusing on developing the dermal delivery of drugs developed by the Company containing self-delivering, stabilized siRNAs that selectively kill squamous and basal carcinoma cells while leaving non-cancerous cutaneous cells unharmed.

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 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.

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 will continue to present our findings at academic and industry conferences and expect to publish our research findings in peer-reviewed journals. We intend to seek strategic partners as we progress into in vivo studies to develop our therapeutics targeted at squamous and basal cell skin cancers.

Previous wording

Research and optimization of our platform technologies are conducted in laboratories at our wholly owned subsidiary PPLS and leased laboratory space at The University of Texas at San Antonio.

Current wording

Research and optimization of our platform technologies are now conducted in laboratories at our wholly owned subsidiary PPLS and leased laboratory space.

Previous wording

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

Current wording

Key financial results for the six months ended June 30, 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, 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.

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 June 30, 2026, we had cash and cash equivalents of $2.4 million. As of August 3, 2026, we had cash and cash equivalents of $1.0 million, which we expect will support our operations through August 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 June 30, 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 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.

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 June 30, 2026, we had working capital of approximately $1.2 million and an accumulated deficit of approximately $75.6 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 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.

Current wording

Net loss for the three months ended June 30, 2026, was approximately $3.4 million, compared to a net loss of approximately $4.1 million for the three months ended June 30, 2025.

Previous 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.

Current wording

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

Previous 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:

Current wording

Operating expenses totaled approximately $4.8 million and $3.8 million during the three months ended June 30, 2026 and 2025, respectively. The increase in operating expenses is the result of the following factors:

Previous 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.

Current wording

Selling, general and administrative expenses totaled approximately $2.9 million and $2.2 million for the three months ended June 30, 2026 and 2025, respectively. The increase of approximately $644,000, or 29%, for the three months ended June 30, 2026, compared to the same period in 2025 was primarily attributable to an increase in stock compensation expense, sales and marketing costs due to additional personnel and support services to expand sales of our diagnostic test, CyPath® Lung.

Previous 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.

Current wording

Depreciation and amortization expenses totaled $62,000 and $113,000 for the three months ended June 30, 2026 and 2025, respectively. The decrease of approximately $51,000, or 46%, for the three months ended June 30, 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

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.

Current wording

Our direct costs and expenses consist primarily of direct labor for pathology services, laboratory supplies and reagents, laboratory equipment, and allocated shared facilities. Direct costs and expenses totaled approximately $2.0 million and $2.4 million during the six months ended June 30, 2026 and 2025, respectively. The decrease of approximately $0.4 million, or 15%, 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, partially offset by increases attributable to the addition of personnel to process tests related to the sale of CyPath® Lung and to our clinical study.

Previous 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.

Current 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 $61.4 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 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.

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 six months ended June 30, 2026 and 2025, we had net losses of $7.0 million and $6.7 million, respectively, and we expect to incur substantial additional losses in future periods. We have an accumulated deficit of approximately $75.6 million as of June 30, 2026. Despite our recent financing in June 2026 in which we raised gross proceeds of $3.2 million, we believe our current cash and anticipated revenue from operations will not be sufficient to support our operations through August 2026. Based on our current expected level of operating expenditures, current expected levels of revenue, and the cash and cash equivalents on hand at June 30, 2026, of $2.4 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 $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.

Current wording

Net cash used in operating activities was approximately $6.4 million and $4.3 million for the six months ended June 30, 2026 and 2025, respectively. The increase of approximately $2.4 million in cash used by operations during the six months ended June 30, 2026, compared to the same period in 2025 was primarily attributable to an increase of $0.3 million in our loss from operations offset by a decrease in accounts receivable by $1.1 million compared to the prior year, an increase of stock based compensation of $0.3 million compared to the prior year, and a fair value adjustment to the warrant liability by $1.1 million related to the May 2025 warrant agreement.

Previous 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.

Current wording

We used approximately $96,000 for the six months ended June 30, 2026, in investing activities related primarily to purchase of computer and lab equipment, compared to approximately $64,000 used in investing activities for the six months ended June 30, 2025.

Previous 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.

Current wording

Net Cash Provided by Financing Activities

Previous wording

Net Cash Used in Financing Activities

Current wording

Cash provided in financing activities was approximately $2.5 million compared to cash provided by financing activities of approximately $4.1 million for the six months ended June 30, 2026 and 2025, respectively. The change in proceeds from prior year was primarily related to net proceeds from the equity transactions of $2.7 million offset by payments for loans and finance leases of $0.1 million, compared to the prior year net proceeds of $4.4 million offset by payments for loans and finance leases of $0.2 million.

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-cancelable 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-cancellable obligations under these agreements are not material.

Previous 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.

Current 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. 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.