bioAffinity Technologies, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
BIAF$2.72+4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001493152-24-012358
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001840
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 70 previous paragraphs and 84 current paragraphs.
38 unchanged; 22 reworded; 22 added; 10 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Current Year Financial Highlights
Current report
Key financial results for the year ended December 31, 2024 include:
Current report
Recent Financial Developments
Current report
Targeted Strategic Actions
Current report
In March 2025, we announced targeted strategic actions to improve financial performance and accelerate the commercial growth of CyPath® Lung, taking steps to deliver approximately $4 million in annual cost savings at our subsidiary PPLS, while increasing resources to expand CyPath® Lung sales in high-potential national markets. Specifically, cost savings are a result of labor cost reductions, operational efficiency enhancements, and discontinuing certain pathology services with suboptimal profit margins to focus on high-margin services such as CyPath® Lung and by discontinuing certain pathology services with suboptimal profit margins.
Current report
Public and Private Offerings
Current report
On February 26, 2025, pursuant to the terms of the February Inducement Agreement certain holders of existing warrants exercised for cash (i) October Warrants to purchase an aggregate of up to 1,302,082 shares of Common Stock, at the reduced exercise price of $0.58 per share, and (ii) August Warrants to purchase an aggregate of up to 1,136,391 shares of Common Stock, at the reduced exercise price of $0.58 per share. We received aggregate gross proceeds of approximately $1.4 million, before deducting advisory fees and other expenses payable by us. In consideration of the immediate exercise of the October Warrants and August Warrants by the holders thereof in accordance with the February Inducement Agreement, we issued unregistered common warrants (the “February Warrants”) to purchase an aggregate of up to 2,926,166 shares of Common Stock (120% of the number of shares of Common Stock issuable upon exercise of the October Warrants and August Warrants) to such holders.
Current report
On October 21, 2024, we issued to certain institutional investors (i) in a registered direct offering, 2,048,294 shares of our Common Stock, and (ii) in a concurrent private placement (the “October Private Placement”), common warrants to purchase an aggregate of 2,662,782 shares of Common Stock, with an exercise price of $1.50, pursuant to a securities purchase agreement, dated October 18, 2024, that we entered into with such institutional investors, and received aggregate gross proceeds from the offerings of approximately $2.7 million, before deducting placement agent fees and other offering expenses. The common warrants issued in the October Private Placement became exercisable on December 20, 2024, the date that our stockholders approved the issuance of the shares of Common Stock issuable upon exercise of such warrants, and expire on December 19, 2029.
Current report
Selling, general and administrative expenses totaled approximately $9.9 million and $6.8 million for the years ended December 31, 2024 and 2023, respectively. The increase of approximately $3.1 million, or 46% was primarily attributable to the laboratory operations of PPLS being owned for the full fiscal year 2024, compared to approximately 3.5 months in fiscal year 2023. Additionally, the increase was due to the expansion of sales efforts for CyPath® Lung, partially offset by a reduction in legal and professional fees.
Current report
Other net income (expense) totaled $129 and $(27,796) for the years ended December 31, 2024 and 2023, respectively, an increase of approximately $28,000, or 100%. The net other expense for the year ended December 31, 2023 related to the loss on the disposal of an asset and other non-operating costs. The net other income for the year ended December 31, 2024 related to approximately a $9,000 gain on a sale of an asset and offset by property taxes.
Current report
Recent Financings
Current report
February 2025 Warrant Inducement
Current report
On February 26, 2025, pursuant to the terms of the February Inducement Agreement certain holders of existing warrants exercised for cash (i) October Warrants to purchase an aggregate of up to 1,302,082 shares of Common Stock, at the reduced exercise price of $0.58 per share, and (ii) August Warrants to purchase an aggregate of up to 1,136,391 shares of Common Stock, at the reduced exercise price of $0.58 per share. We received aggregate gross proceeds of approximately $1.4 million, before deducting advisory fees and other expenses payable by us. In consideration of the immediate exercise of the October Warrants and August Warrants by the holders thereof in accordance with the February Inducement Agreement, we issued unregistered common warrants to purchase an aggregate of up to 2,926,166 shares of Common Stock (120% of the number of shares of Common Stock issuable upon exercise of the October Warrants and August Warrants) to such holders.
Current report
October 2024 Registered Direct Offering and Concurrent Private Placement
Current report
On October 21, 2024, we issued to certain institutional investors (i) in a registered direct offering, 2,048,294 shares of our Common Stock, and (ii) in a concurrent private placement, common warrants to purchase an aggregate of 2,662,782 shares of Common Stock, with an exercise price of $1.50, pursuant to a securities purchase agreement, dated October 18, 2024, that we entered into with such institutional investors, and received aggregate gross proceeds from the offerings of approximately $2.7 million, before deducting placement agent fees and other offering expenses.
Current report
August 2024 Warrant Inducement, Registered Director Offering and Concurrent Private Placement
Current report
On August 5, 2024, pursuant to the terms of the August Inducement Agreement, certain holders of existing warrants, exercised for cash March Warrants to purchase an aggregate of up to 1,041,667 shares of Common Stock, at the reduced exercise price of $1.25 per share. We received aggregate gross proceeds of approximately $1.3 million, before deducting advisory fees and other expenses payable by us. In consideration of the immediate exercise of the March Warrants by the holders thereof in accordance with the August Inducement Agreement, we issued unregistered common warrants to purchase an aggregate of up to 1,302,082 shares of Common Stock (120% of the number of shares of Common Stock issuable upon exercise of the March Warrants) to such holders.
Current report
On August 5, 2024, we also issued to an institutional investor (i) in a registered direct offering, 360,000 shares of Common Stock, and (ii) in a concurrent private placement, warrants to purchase an aggregate of 450,000 shares of Common Stock, with an exercise price of $1.50. We received aggregate gross proceeds from the offerings of approximately $450,000, before deducting fees payable to the placement agent and other estimated offering expenses.
Current report
March 2024 Registered Direct Offering and Concurrent Private Placement
Current report
Assessment of Goodwill and Intangible Assets
Current report
Our indefinite-lived assets include Goodwill and Intangible Assets resulting from the acquisition of PPLS. Goodwill represents the purchase price in excess of fair values assigned to the underlying identifiable net assets of the acquired business. Goodwill and Intangible Assets are reviewed annually for impairment unless circumstances dictate the need for more frequent assessment.
Current report
In performing impairment tests for our Goodwill in 2024, in accordance withASC 350 - Intangibles – Goodwill and Other, we opted to complete a quantitative assessment at the PPLS level as opposed to relying on a qualitative assessment as permitted in the guidance. This quantitative assessment required that the estimated fair value of PPLS’ net assets, including Goodwill, be calculated and compared to the carrying amount. If that estimated fair value is in excess of the carrying amount, no impairment is recognized. We performed this assessment as of December 31, 2024. We estimated the fair value of the net assets tested using a discounted cash flow model. The income-based approach required significant judgment to estimate future cash flows, including revenue growth inclusive of long-term growth rate assumptions and the discount rate. Significant changes in our estimates and assumptions could affect our fair value calculations. Our estimate of fair value exceeded the carrying amount and therefore resulted in no impairment.
Removed paragraphs (10)
Previous report
Recent Developments
Previous report
The Common Stock was offered pursuant to a shelf registration statement on Form S-3 (File No. 333-275608), which was declared effective on November 27, 2023, (as amended from time to time, the “Registration Statement”). The Common Warrants and the shares of Common Stock issuable upon exercise of the Common Warrants (the “Common Warrant Shares”) were issued in a concurrent private placement and have not been registered. The Common Warrants will be exercisable commencing on the effective date of stockholder approval for the issuance of the shares of Common Stock issuable upon exercise of the Common Warrants (the “Stockholder Approval Date”) and will expire on the fifth anniversary of the Stockholder Approval Date.
Previous report
Pursuant to the terms of the Purchase Agreement, until 60 days following the closing of the Transactions, we have agreed not to issue (or enter into any agreement to issue) any shares of Common Stock or Common Stock equivalents, subject to certain exceptions. We have further agreed not to enter into an agreement involving a variable rate transaction until 12 months following the closing of the Transactions, provided however that the prohibition on “at-the-market offerings” and the issuance of common stock pursuant to an equity line of credit shall expire on the six-month anniversary of the closing date of this offering. In addition, our Chief Executive Officer and each of our directors have entered into lock-up agreements with the Company pursuant to which each of them has agreed not to, for a period of 60 days from the closing of the Transactions, offer, sell, transfer or otherwise dispose of our securities, subject to certain exceptions. In addition, from the date of the Purchase Agreement until the date that is nine (9) months after the date of the Purchase Agreement, upon any issuance by the Company or any of its subsidiaries of Common Stock, common stock equivalents for cash consideration, Indebtedness (as defined in the Purchase Agreement) or a combination of units thereof for capital raising purposes other than an at-the-market offering (a “Subsequent Financing”), the Purchasers shall have the right to participate in the Subsequent Financing in an amount up to the percentage of such Purchaser’s participation in the Transactions on the same terms, conditions and price provided for in the Subsequent Financing.
Previous report
WallachBeth Capital LLC acted as the placement agent for the offering and received a cash fee of 9.0% of the aggregate gross proceeds paid to us for the securities sold in the transactions and reimbursement of certain out-of-pocket expenses. As additional compensation we issued to WallachBeth Capital LLC a warrant (the “Placement Agent Warrant”) to purchase an aggregate of 32,000 shares of Common Stock, such number of shares equal to two percent (2.0%) of the number of shares of Common Stock issued in the registered direct offering, at an exercise price per share equal to $1.64, which is equal to the exercise price of the Common Warrants. The Placement Agent Warrant is exercisable via “cashless exercise” in certain circumstances.
Previous report
1 Patient services fees includes direct billing for CyPath® Lung diagnostic test.
Previous report
2 Other revenues include pre-acquisition CyPath® Lung royalty income and laboratory services.
Previous report
Selling, general and administrative expenses totaled approximately $6.8 million and $2.5 million during 2023 and 2022, respectively. The increase of approximately $4.3 million, or 174%, for 2023 compared to 2022, was primarily attributable to general and administration costs acquired from PPLS ($820,000), accounting, legal, and professional fee costs associated with the acquisition of PPLS ($811,000), the accounting, legal, and professional fee costs associated with the SEC filing of a registration statement on Form S-1 ($197,000), increase in stock-based compensation ($486,000), increase in employee compensation ($838,000) as we added sales and administrative personnel, increase in branding and marketing collateral ($391,000), increase in directors and officers (“D&O”) insurance ($290,000), increase in public company-related expenses ($294,000) as well as an increase related to board compensation ($147,000), and other operational expenses. Additionally, compensation increased due to additional personnel and support services to support the launch of sales of our diagnostic test, CyPath® Lung.
Previous report
Other income (expense) totaled approximately $57,210 and ($4.1) million for 2023 and 2022, respectively.
Previous report
(Loss) gain on change in fair value of convertible notes
Previous report
The loss on the change in fair value of convertible notes was $0 during 2023 compared to a loss of $1.9 million during 2022, respectively. The prior year recognized the change in the fair value of convertible notes converted to stock, the reduction in the expected term, and other assumptions during the reported periods.
Reworded paragraphs (22)
Previous wording
bioAffinity Technologies, Inc. (the “Company,” “bioAffinity,” “we,” or “our”) develops noninvasive diagnostics to detect early-stage lung cancer and other diseases of the lung. We are advancing research into our therapeutic discoveries which could result in broad-spectrum cancer treatments in the future. We develop proprietary noninvasive diagnostic tests using flow cytometry and automated analysis developed by artificial intelligence (AI). One of our diagnostic tests analyzes cell populations, including cancer and cancer-related cells, that are indicative of a specific diseased state. Research and optimization of our platform technologies are conducted in laboratories at our wholly owned subsidiary, Precision Pathology Laboratory Services, LLC (“PPLS”) and The University of Texas at San Antonio. Commercial laboratory services are performed at PPLS.
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 artificial intelligence (“AI”). One of our diagnostic tests analyzes cell populations, including cancer and cancer-related cells, that are indicative of a specific diseased state.
Previous wording
Through our wholly owned subsidiary PPLS, we acquired the assets of Village Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, including the CAP-accredited and CLIA-certified commercial laboratory it owned, and we now own and operate the clinical anatomic and clinical pathology laboratory.
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, our research has led to discoveries and advancement of novel cancer therapeutic approaches that specifically and selectively target cancer cells.
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
We also agreed to file a registration statement to register the resale of the Common Warrant Shares and the shares of Common Stock issuable upon exercise of the Placement Agent Warrant (the “Placement Agent Warrant Shares”) within 30 days of the date of the Purchase Agreement and to use commercially reasonable efforts to keep such registration statement effective at all times until no Purchaser owns any Warrants or Warrant Shares and until the Placement Agent does not own the Placement Agent Warrant or any Placement Agent Warrant Shares. We are also obligated to hold a stockholders’ meeting 90 days after the closing date and every three months thereafter seeking approval of the exercise of the Common Warrants.
Current wording
We agreed in the February Inducement Agreement to file a registration statement to register the resale of the shares of Common Stock (the “February Warrant Shares”) issuable upon exercise of the February Warrants (the “Resale Registration Statement”) as soon as practicable (and in any event within 45 calendar days following the date of the Inducement Agreement), and to use commercially reasonable efforts to have the Resale Registration Statement declared effective by the SEC and to keep such registration statement effective at all times until the Holders no longer own any February Warrants or February Warrant Shares.
Previous wording
Prior to the acquisition, Precision Pathology Services had licensed and developed CyPath® Lung as an 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 December 31, 2023, we had total working capital of $1.7 million and an accumulated deficit of approximately $44.6 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; however, we do expect revenue to increase due to the acquisition. We intend to license our therapeutic products for clinical development should animal and pre-clinical studies prove successful.
Current wording
We have never been profitable, and as of December 31, 2024, we had a working capital deficit of $0.4 million and an accumulated deficit of approximately $53.6 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; however, we do expect revenue to increase due to accelerating sales of CyPath® Lung and cost-saving measures we recently instituted at PPLS. We intend to seek strategic partners for our therapeutic discoveries related to selective broad-spectrum cancer treatments through pre-clinical and clinical development.
Previous wording
Our results of operations have varied significantly from year to year and quarter to quarter and may vary significantly in the future. Net loss for the year ended December 31, 2023, was approximately $7.9 million, compared to a net loss of approximately $8.2 million for the year ended December 31, 2022, resulting from the operational activities described below.
Current wording
Our results of operations have varied significantly from year to year and quarter to quarter and may vary significantly in the future. Net loss for the year ended December 31, 2024 was approximately $9.0 million, compared to a net loss of approximately $7.9 million for the year ended December 31, 2023, resulting from the operational activities described below.
Previous wording
Post-acquisition, additional revenue streams have been consolidated starting September 19, 2023. PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. Pre-acquisition, bioAffinity Technologies’ revenue was generated in three ways for pre-acquisition: (1) royalties from the Company’s diagnostic test, CyPath® Lung, (2) clinical flow cytometry services provided to Village Oaks related to the Company’s CyPath® Lung test, and (3) CyPath®Lung tests purchased by the U.S. Department of Defense (“DOD”) for an observational study, “Detection of Abnormal Respiratory Cell Populations in Lung Cancer Screening Patients Using the CyPath®Lung Assay (NCT05870592),” and research and development on using bronchoalveolar lavage fluid as a biological sample to assess cardiopulmonary function and exercise performance in military personnel post-COVID-19 infection. The royalty income from CyPath®Lung and clinical flow cytometry services income, beginning September 19, 2023, are related party income, and therefore, eliminated from consolidated net revenues. See net revenue summarized in the table below.
Current wording
Post-acquisition, additional revenue streams have been generated starting September 19, 2023. PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. Pre-acquisition, bioAffinity Technologies’ revenue was generated in three ways: (1) royalties from our diagnostic test, CyPath® Lung, (2) clinical flow cytometry services provided to Village Oaks related to CyPath® Lung test, and (3) CyPath®Lung tests purchased by the U.S. Department of Defense (“DOD”) for an observational study, “Detection of Abnormal Respiratory Cell Populations in Lung Cancer Screening Patients Using the CyPath®Lung Assay (NCT05870592),” and research and development on using bronchoalveolar lavage fluid as a biological sample to assess cardiopulmonary function and exercise performance in military personnel post-COVID-19 infection. The royalty income from CyPath®Lung and clinical flow cytometry services income, beginning September 19, 2023, are related party income, and therefore, eliminated from consolidated net revenues. See net revenue summarized in the table below.
Previous wording
Operating expenses totaled $10.5 million and $4.0 million during 2023 and 2022, respectively. The increase in operating expenses is the result of the following factors.
Current wording
Operating expenses totaled $18.3 million and $10.5 million for the years ended December 31, 2024 and 2023, 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 $1.7 million and $467 during 2023 and 2022, respectively. The increase of approximately $1.7 million for 2023 compared to 2022 was primarily attributable to the laboratory operations of the newly acquired PPLS.
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 approximately $6.0 million and $1.7 million during 2024 and 2023, respectively. The increase of approximately $4.3 million, or 244%, was primarily attributable to the laboratory operations of PPLS being owned for the full fiscal year 2024, compared to approximately 3.5 months in fiscal year 2023.
Previous wording
Our research and development expenses consist primarily of expenditures for lab operations, preclinical studies, compensation, and consulting costs. Research and development expenses totaled $1.5 million and $1.4 million during 2023 and 2022, respectively. The increase of approximately $89,000, or 6%, for 2023 compared to 2022 was primarily attributable to an increase in compensation costs and benefits as we added research personnel.
Current wording
Our research and development expenses consist primarily of expenditures for lab operations, preclinical studies, compensation, and consulting costs. Research and development expenses remained consistent year-over-year, totaling $1.5 million for the years ended December 31, 2024 and 2023.
Previous wording
Clinical development expenses totaled approximately $257,000 and $146,000 during 2023 and 2022, respectively. The increase of approximately $111,000, or 76%, for 2023 compared to 2022 was primarily attributable to an increase in compensation costs and benefits as we added clinic development personnel.
Current wording
Clinical development expenses totaled $321,655 and $256,661 for the years ended December 31, 2024 and 2023, respectively. The increase of $64,994, or 25% was primarily attributable to an increase in compensation costs and benefits as we added clinic development personnel.
Previous wording
We had net interest income (expense) of approximately $85,000 and ($2.5) million for the years ended December 31, 2023 and 2022, respectively. The current year amount related to approximately $120,000 interest earned from money market account partially offset by interest paid in financing lease for laboratory equipment. The favorable improvement is based on convertible notes being converted to common stock in the prior year.
Current wording
We had net interest (expense) income of approximately $(74,865) and $85,006 for the years ended December 31, 2024 and 2023, respectively. The prior year amount related to approximately $120,000 interest earned from money market account partially offset by interest paid in financing lease for laboratory equipment. The current year amount related to approximately $18,000 interest earned from money market account offset by interest paid in financing lease for laboratory equipment.
Previous wording
To date, we have funded our operations primarily through our IPO, exercise of warrants, and the sale of our equity and debt securities, resulting in gross proceeds of approximately $36.8 million. The Company has evaluated whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date the consolidated financial statements are issued.
Current wording
To date, we have funded our operations primarily through our IPO, exercise of warrants, and the sale of our equity and debt securities, resulting in gross proceeds of approximately $42.7 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 consolidated financial statements are issued.
Previous wording
On March 6, 2024, we received aggregate gross proceeds of $2.5 million from the sale to four institutional investors (the “Purchasers”) of (1) 1,600,000 shares of our Common Stock in a registered direct offering, and (2) Common Warrants to purchase an aggregate of 1,600,000 shares of Common Stock (the “Common Warrants”) with an exercise price of $1.64 in a concurrent private placement (the “Transactions”).
Current wording
On March 8, 2024, we issued to certain investors, pursuant to a Securities Purchase Agreement (1) 1,600,000 shares of Common Stock in a registered direct offering, and (2) warrants to purchase an aggregate of 1,600,000 shares of Common Stock with an exercise price of $1.64, in a concurrent private placement. The direct offering resulted in gross proceeds of $2.5 million.
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. During 2023 and 2022, we had net losses of $7.9 million and $8.2 million, respectively, and we expect to incur substantial additional losses in future periods. We have an accumulated deficit of approximately $44.6 million as of December 31, 2023. Based on the Company’s current expected level of operating expenditures and the cash on hand of approximately $2.7 million at the time of this filing, 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 consolidated financial statements. Cash and cash equivalents were approximately $2.8 million as of December 31, 2023 which does not take into account the gross proceeds of $2.5 million that we received in March 2024. At the time of this filing, cash is expected to be sufficient through September 2024. 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. 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. During 2024 and 2023, we had net losses of $9.0 million and $7.9 million, respectively, and we expect to incur substantial additional losses in future periods. We have an accumulated deficit of approximately $53.6 million as of December 31, 2024. Based on our current expected level of operating expenditures and the cash on hand of approximately $390 thousand at the time of this filing, 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 consolidated financial statements. Without funding from the proceeds of a capital raise or strategic relationship or grant, management anticipates that our cash resources are sufficient to continue operations through April 2025.
Previous wording
Net cash used in operating activities was approximately $6.0 million and $4.1 million for the years ended December 31, 2023, and 2022, respectively. The increase of approximately $1.9 million in cash used by operations during the year ended December 31, 2023, compared to 2022, was primarily attributable to prior year recognizing approximately $1.9 million in fair value adjustments on convertible notes payable.
Current wording
Net cash used in operating activities was approximately $7.3 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively. The increase of approximately $1.3 million in cash used by operations was primarily attributable to the laboratory operations of PPLS being owned for the full fiscal year 2024, compared to approximately 3.5 months in fiscal year 2023. Additionally, the increase was due to the expansion of sales efforts for CyPath® Lung.
Previous wording
The Company used approximately $2.2 million in investing activities in 2023, compared to $0.2 million used for the year ended December 31, 2022. The increase in cash used in investing activities in 2023, compared to 2022, is attributable to the acquisition of PPLS.
Current wording
We used approximately $79,000 in investing activities for the year ended December 31, 2024, compared to $2.2 million used for the year ended December 31, 2023. The significant decrease of $1.4 million in cash used in investing activities was primarily due to equipment purchases in the current year, and the investing activities in the prior year related to the acquisition of PPLS.
Previous wording
During the year ended December 31, 2023, net cash used by financing activities was $345,000 as compared to net cash proceeds of $14.3 million during 2022. During the year ended December 31, 2022, net cash provided by financing activities was $14.3 million primarily due to net proceeds of approximately $6.0 million from issuance of Common Stock in our IPO, as well as proceeds of approximately $7.8 million from the exercise of warrants and options.
Current wording
During the year ended December 31, 2024, net cash provided by financing activities was $5.5 million as compared to net cash used in financing activities of $0.3 million during 2023, representing an increase of approximately $5.9 million. During the year ended December 31, 2024, net cash provided by financing activities was primarily due to net proceeds of approximately $5.8 million from issuance of Common Stock and, option and warrant exercises, partially offset by financing payments.
Previous wording
The preparation of financial statements in conformity with GAAP in the United States requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these significant judgments and estimates on historical experience and other assumptions it believes to be reasonable based upon information presently available. Actual results could differ from those estimates under different assumptions, judgments, or conditions.
Current wording
The preparation of financial statements in conformity with GAAP in the U.S. requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these significant judgments and estimates on historical experience and other assumptions it believes to be reasonable based upon information presently available. Actual results could differ from those estimates under different assumptions, judgments, or conditions.
Previous wording
We follow ASC 606,Revenue from Contracts with Customers, which requires revenue recognition in the period in which the service was performed. To be able to report timely net revenues for the period, estimates are used for a portion of uncollected balances. These estimates relate to 3 rd party historical contractual discounts and adjustments (e.g. insurance providers) and patient historical uncollectible amounts. There can be a significant delay from the time a patient has been serviced to the invoicing of that service and then the net proceeds collected. Historical data is used to determine estimates for those “in service” revenues that have not been billed or collected at the reporting period.
Current wording
We follow ASC 606,Revenue from Contracts with Customers, which requires revenue recognition in the period in which the service was performed. To be able to report timely net revenues for the period, estimates are used for a portion of uncollected balances. The Company follows a standard process, which considers historical denial and collection experience and other factors (including the period of time that the receivables have been outstanding), to estimate contractual allowances and implicit price concessions, recording adjustments in the current period as changes in estimates. The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation.
Previous 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 Company enters into contracts with its customers for these enters. 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.
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 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 increment 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.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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 report — wording carried from elsewhere
Cash and cash equivalents were approximately $1.1 million as of December 31, 2024, which does not take into account the gross proceeds of $1.4 million that we received in February 2025. 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. 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.