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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-31 · 818 added, 800 removed, 275 unchanged (85% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information

required to be disclosed in the reports filed under the Exchange Act, such as this Annual Report, is collected, recorded, processed,

summarized, and reported within the time periods specified under the rules of the SEC.

of December 31, 2023, the end of the period covered by this Annual Report, our Chief Executive Officer and Chief Financial Officer evaluated

2 unchanged sentences

Rules 13a-15(e)and 15d-15(e)).

Based on that evaluation, management has concluded

that due to limited resources and limited number of employees, its internal control over financial reporting was ineffective as of December 31, 2022, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

in accordance with U.S.

To mitigate the limited resources and employees, we rely heavily on direct management oversight of transactions,

along with the use of legal and accounting professionals.

As we grow, we expect to increase the number of employees, which we believe

will enable us to implement adequate segregation of duties within the internal control framework.

The Chief Executive Officer and Chief Financial

Officer assessed the effectiveness of our internal controls over financial reporting as of December31, 2023.

Based on their assessment,

they have concluded that, as of December 31, 2023, our internal controls over financial reporting is effective.

Control over Financial Reporting

Annual Report on Internal Control over Financial Reporting

annual report does not include a report of management’s assessment regarding internal control over financial reporting due to a

transition period established by rules of the SEC for newly public companies.

Report of the Registered Public Accounting Firm

annual report does not include an attestation report of the Company’s registered public accounting firm due to a transition period

established by rules of the SEC for newly public companies.

management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined

in Rule 13a-15(f) of the Exchange Act.

Our internal control system is designed to provide reasonable assurance regarding the preparation

and fair presentation of financial statements for external purposes in accordance with GAAP.

All internal control systems, no matter

how well designed, have inherent limitations and can provide only reasonable assurance that the objectives of the internal control system

management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures

and our internal control processes will prevent all errors or fraud.

A control system, no matter how well conceived and operated, can

provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control

system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control

issues and instances of error or fraud, if any, within the Company have been detected.

These inherent limitations include the realities

that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls

can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there

can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls

may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be

However, these inherent limitations are known features of the financial reporting process.

Therefore, it is possible to design

into the process safeguards to reduce, though not eliminate, this risk.

the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted

an evaluation of the effectiveness of our internal control over financial reporting, based on criteria established by the Committee of

Sponsoring Organizations of the Treadway Commission (“COSO”) in its 2013 Internal Control-Integrated Framework.

our evaluation, we concluded that our internal control over financial reporting was effective as of December 31, 2023.

of December 31, 2023, we are a non-accelerated filer, our independent registered accounting firm is not required to issue an attestation

report on our internal control over financial reporting .

in Internal Control over Financial Reporting

were no changes in our internal controls (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) over financial reporting

during the year ended December 31, 2022, covered by this Annual Report that could materially affect, or are reasonably likely to materially

affect, our financial reporting.

Company introduced several internal controls (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) over financial reporting

during the 3 months ended December 31, 2023, covered by this Annual Report that could materially affect, or are reasonably likely to

materially affect, our financial reporting.

The Company increased accounting personnel and implemented segregation of preparer and approver

duties for all material financial transactional procedures.

Furthermore, the Company implemented several monitoring controls over financial

reporting including, but not limited to, monthly checklist, monthly account variance analysis, management financial reporting analysis

and dual segregated account reconciliations.

All vendor payments have been transitioned from manual procedures to automated tool requiring

dual roles and responsibilities for recording, approving and releasing payments.

Other Information.

the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement”

or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers, and Corporate Governance.

information required by this item of Form 10-K will be included under the caption “Directors, Executive Officers, and Corporate

Governance” in our 2023 Proxy Statement, and is incorporated by reference herein.

The information required by this item of Form 10-K will be included under the caption “Directors, Executive

Officers, and Corporate Governance” in our proxy statement for our 2024 annual meeting of stockholders (the “2024 Proxy Statement”),

and is incorporated by reference herein.

Executive Compensation.

7 unchanged sentences

by reference herein.

Principal Accounting Fees and Services.

Principal Accountant Fees and Services.

information required by this item of Form 10-K will be included in our 2024 Proxy Statement and is incorporated by reference herein.

Exhibits and Financial Statement Schedules.

Exhibit and Financial Statement Schedules.

Financial Statements and Schedules.

“Index to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K.

Amended and Restated Certificate of Incorporation of Registrant, as currently in effect.

Bylaws of the Registrant, as currently in effect.

of Registrant’s Common Stock Certificate.

“Index to Consolidated Financial Statements” beginning on page F-1 following the signature page as required by Part II, Item

8 of this Annual Report.

Agency Agreement, dated March 6, 2024, by and among the Company and WallachBeth Capital LLC

(Incorporated by reference as Exhibit 1.1 to the Registrant’s Form 8-K filed with the

SEC on March 8, 2024)

Certificate of Incorporation of the Registrant as filed with the Delaware Secretary of State on March 26, 2014

and Restated Bylaws of Registrant (Incorporated by reference as Exhibit 3.6 to the Registrant’s Form S-1/A (File No.

filed with the SEC on June 16, 2022)

Certificate of Amendment to the Certificate of Incorporation of Registrant, as filed with the Delaware Secretary of State on May 31, 2016

of Designation of Series A Convertible Preferred Stock of the Registrant filed with the Delaware Secretary of State on July 13, 2017

(Incorporated by reference as Exhibit 3.4 to the Registrant’s Form S-1/A (File No.

333-264463) filed with the SEC on May 25,

Certificate of Amendment to the Certificate of Incorporation of Registrant, as filed with the Delaware Secretary of State on November 29, 2021

of Amendment to the Certificate of Incorporation of Registrant, as filed with the Delaware Secretary of State on June 23, 2022 (Incorporated

by reference as Exhibit 3.2 to the Registrant’s Form S-1/A (File No.

333-264463) filed with the SEC on May 25, 2022)

of Amendment to the Certificate of Incorporation of Registrant, as filed with the Delaware Secretary of State on June 6, 2023 (Incorporated

by reference as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on June

of Registrant’s Common Stock Certificate (Incorporated by reference as Exhibit 4.1 to the Registrant’s Form S-1/A filed

with the SEC on June 16, 2022)

Stock Purchase Warrant issued to San Antonio Economic Development Corporation dated March

of Common Stock Purchase Warrant issued to Holders of the Registrant’s Convertible Promissory Notes.

of Placement Agent’s Warrant issued to WallachBeth Capital, LLC.

of Representative’s Warrant issued to WallachBeth Capital, LLC.

of (Tradeable) Common Stock Purchase Warrant issued as part of the Units sold in the Registrant’s IPO.

of Warrant Agent Agreement for the Warrants issued as part of the Units sold in the Registrant’s IPO.

of (Non-tradeable) Common Stock Purchase Warrant issued as part of the Units sold in the Registrant’s IPO.

17, 2017 (Incorporated by reference as Exhibit 4.2 to the Registrant’s Form S-1/A filed

with the SEC on May 25, 2022).

of Common Stock Purchase Warrant issued to Holders of the Registrant’s Convertible Promissory Notes (Incorporated by reference

as Exhibit 4.3 to the Registrant’s Form S-1/A filed with the SEC on May 25, 2022)

of Placement Agent’s Warrant issued to WallachBeth Capital, LLC (Incorporated by reference

as Exhibit 4.4 to the Registrant’s Form S-1/A filed with the SEC on August 5, 2022)

of Representative’s Warrant issued to WallachBeth Capital, LLC, in connection with the Registrant’s Initial Public Offering

(Incorporated by reference as Exhibit 4.5 to the Registrant’s Form S-1/A filed with the SEC on July 28, 2022).

of (Tradeable) Common Stock Purchase Warrant issued as part of the Units sold in the Registrant’s

Initial Public Offering (Incorporated by reference as Exhibit 4.1 to the Registrant’s

Form 8-K filed with the SEC on September 6, 2022)

of Warrant Agent Agreement for the Warrants issued as part of the Units sold in the Registrant’s

Initial Public Offering (Incorporated by reference as Exhibit 4.3 to the Registrant’s

Form 8-K filed with the SEC on September 6, 2022)

of (Non-tradeable) Common Stock Purchase Warrant issued as part of the Units sold in the

Registrant’s Initial Public Offering (Incorporated by reference as Exhibit 4.2 to the

Registrant’s Form 8-K filed with the SEC on September 6, 2022)

of Amendment to Common Share Purchase Warrants with schedule of warrant holders and warrants

(Incorporated by reference as Exhibit 4.1 to the Registrant’s Current Report on

Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

of Amendment to Initial Public Offering Warrants with schedule of warrant holders and warrants (Incorporated by reference as Exhibit

4.2 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

of Warrant to Purchase Common Stock (Incorporated by reference as Exhibit 4.1 to the Registrant’s Form 8-K filed with the SEC

on March 8, 2024)

of Placement Agent Warrant (Incorporated by reference as Exhibit 4.2 to the Registrant’s

Form 8-K filed with the SEC on March 8, 2024)

Description of Securities

Equity Incentive Plan of Registrant, as amended.

(Incorporated by reference as Exhibit 10.1 to the Registrant’s Form S-1 filed

with the SEC on April 25, 2022)

Chairman Employment Agreement dated January 1, 2020, by and between Registrant and Steven Girgenti, as amended.

(Incorporated by

reference as Exhibit 10.2 to the Registrant’s Form S-1 filed with the SEC on April 25, 2022)

Agreement dated February 1, 2015, by and between Registrant and Maria Zannes.

(Incorporated by reference as Exhibit 10.3 to the Registrant’s

Form S-1 filed with the SEC on April 25, 2022)

Agreement dated April 4, 2016, by and between Registrant and Vivienne Rebel, as amended.

(Incorporated by reference as Exhibit 10.4

to the Registrant’s Form S-1 filed with the SEC on April 25, 2022)

Agreement dated February 1, 2015, by and between Registrant and Timothy Zannes.

(Incorporated by reference as Exhibit 10.5 to the

Registrant’s Form S-1 filed with the SEC on April 25, 2022)

Agreement dated May 25, 2017, by and between Registrant and Michael Edwards, as amended.

(Incorporated by reference as Exhibit 10.6

to the Registrant’s Form S-1 filed with the SEC on May 25, 2022)

Agreement to Participate in the UTSA New Venture Incubator Program dated June 15, 2015, by and between Registrant and the University

of Texas at San Antonio.

(Incorporated by reference as Exhibit 10.9 to the Registrant’s Form S-1 filed with the SEC on April

Development Agreement dated October 1, 2018, by and between the Registrant and Village Oaks Pathology Services, P.A.

d/b/a Precision

Pathology Services.

dated October 17, 2020, by and between Registrant and GO2 Partners.

of Business Conduct of the Registrant.

Pathology Services (Incorporated by reference as Exhibit 3.2 to the Registrant’s Form S-1/A filed with the SEC on July 27,

dated October 17, 2020, by and between Registrant and GO2 Partners (Incorporated by reference as Exhibit 10.9 to the Registrant’s

Form S-1/A filed with the SEC on July 27, 2022)

of Note Purchase Agreement used by the Registrant in its private offering of Convertible Promissory Notes issued between October

2021 and January 2022 (Incorporated by reference as Exhibit 10.10 to the Registrant’s Form S-1 filed with the SEC on May 25,

Letter between bioAffinity Technologies, Inc.

and Michael Dougherty dated April 11, 2023 (Incorporated by reference as Exhibit 10.1

to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 1, 2023)

Technologies, Inc.

Amended and Restated 2014 Equity Incentive Plan Incorporated by reference as Exhibit 10.1 to the Registrant’s

Current Report on Form 8-K (File No.

001-41463) filed with the SEC on June 7, 2023)

effective as of August 1, 2023, to Employment Agreement, dated February 1, 2015, by and between bioAffinity Technologies, Inc.

Maria Zannes (Incorporated by reference as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

filed with the SEC on July 28, 2023)

Purchase Agreement, effective September 18, 2023, by and among, Precision Pathology Laboratory

Services, LLC, Dr.

Joyce and Village Oaks Pathology Services, P.A.

(Incorporated

by reference as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

Agreement, dated September 18, 2023, by and between The Joyce Living Trust, dated March 19, 2013, and bioAffinity Technologies, Inc.

(Incorporated by reference as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the

SEC on September 20, 2023)

Services Agreement, effective as of September 18, 2023, by and between Precision Pathology

Laboratory Services, LLC and Village Oaks Pathology Services, P.A.

(Incorporated by reference

as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No.

filed with the SEC on September 20, 2023)

Succession Agreement, effective September 18, 2023, by and among, Precision Pathology Laboratory Services, LLC, Dr.

Joyce and Village Oaks Pathology Services, P.A.

(Incorporated by reference as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

Professional Services Agreement, effective as of September 18, 2023, by and between Precision Pathology Laboratory Services, LLC and Village Oaks Pathology Services, P.A.

(Incorporated by reference as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

Employment Agreement, dated September 18, 2023, by and between the Registrant and Roby Joyce,

(Incorporated by reference as Exhibit 10.6 to the Registrant’s Current Report

on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

and Assumption of Lease Agreement, effective September 18, 2023, by and between Precision

Pathology Laboratory Services, LLC and Village Oaks Pathology Services, P.A.

(Incorporated

by reference as Exhibit 10.7 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

Lease, dated July 31, 2019, by and between Village Oaks Pathology Services, P.A.

West Sunset, LLC (Incorporated by reference as Exhibit 10.8 to the Registrant’s Current

Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

and Assumption Agreement, effective September 18, 2023, by and between Precision Pathology

Laboratory Services, LLC and Village Oaks Pathology Services, P.A.

(Incorporated by reference

as Exhibit 10.9 to the Registrant’s Current Report on Form 8-K (File No.

filed with the SEC on September 20, 2023)

Usage Attachment, dated effective as of August 9, 2019, by and between Gen-Probe Sales &

Service, Inc., together with its subsidiaries and affiliates and Village Oaks Pathology Services,

d/b/a Precision Pathology, as amended by that certain Amendment No.

1 to Equipment Usage

Attachment dated November 2, 2020, as further amended by that certain Amendment No.

Equipment Usage Attachment dated November 2, 2020, and as further amended by that certain

Amendment No.

3 to Equipment Usage Attachment dated December 21, 2022 (Incorporated by reference

as Exhibit 10.10 to the Registrant’s Current Report on Form 8-K (File No.

filed with the SEC on September 20, 2023)

Agreement, dated as of January 29, 2015, by and between Leica Microsystems, Inc.

and Precision

Pathology, as amended by Amendment No.

1 to the Master Agreement, dated on or about April

4, 2018, as further amended by that certain Amendment No.

2 to Master Agreement, dated March

23, 2021 (Incorporated by reference as Exhibit 10.11 to the Registrant’s Current Report

on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

Relationship License Agreement, dated December 1, 2022, by and between Pathology Watch, Inc.

and Precision Pathology Services (Incorporated by reference as Exhibit 10.12 to the Registrant’s

Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

of Sale signed by Village Oaks Pathology Services, P.A., effective as of September 18, 2023

(Incorporated by reference as Exhibit 10.13 to the Registrant’s Current Report on Form

8-K (File No.

001-41463) filed with the SEC on September 20, 2023)

Platt Offer Letter (Incorporated by reference as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

filed with the SEC on December 5, 2023)

Technologies, Inc.

Management Incentive Bonus Plan (Incorporated by reference as Exhibit 10.1 to the Registrant’s Current Report

on Form 8-K (File No.

001-41463) filed with the SEC on January 31, 2024)

to Michael Dougherty Offer Letter (Incorporated by reference as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K

001-41463) filed with the SEC on January 31, 2024)

of Securities Purchase Agreement, dated as of March 6, 2024, by and among the Company and the investors parties thereto (Incorporated

by reference as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on March 8, 2024)

of Support Agreement with schedule of signatories (Incorporated by reference as Exhibit 10.2 to the Registrant’s Form 8-K filed

with the SEC on March 8, 2024)

of Business Conduct of the Registrant (Incorporated by reference as Exhibit 14.1 to the Registrant’s Form S-1 filed with the

SEC on May 25, 2022)

Insider Trading Policy of the Registrant

Filed herewith

of Subsidiaries of the Registrant.

Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Filed herewith

Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Filed herewith

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002

Furnished herewith

List of Subsidiaries of the Registrant

Consent of WithumSmith+Brown, PC, independent registered public accounting firm

Certification

of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification

of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification

of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002

Certification

of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002

Clawback Policy

XBRL Instance Document

5 unchanged sentences

Page Interactive Data File (embedded within the Inline XBRL document)

management contract or compensatory plan.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

on its behalf by the undersigned, thereunto duly authorized on the 1 st day of April, 2024.

Technologies, Inc.

Executive Officer, President, and Director

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of

the registrant and in the capacities and on the dates indicated.

President, Chief Executive Officer, and

Director (Principal Executive Officer)

March 31, 2023

Michael Edwards

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Chief Executive Officer, and Director

Executive Officer)

Michael Dougherty

Financial Officer

March 31, 2023

Financial and Accounting Officer)

Steven Girgenti

Executive Chairman and Director

March 31, 2023

Chairman and Director

Robert Anderson

March 31, 2023

Stuart Diamond

March 31, 2023

Mohsin Meghji

March 31, 2023

Roby Joyce, M.D.

Technologies, Inc.

1 unchanged sentence

of Independent Registered Public Accounting Firm (PCAOB ID NO.

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Operations for the years ended December 31, 2022 and 2021

Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Balance Sheets as of December 31, 2023 and 2022

Statements of Operations for the years ended December 31, 2023 and 2022

Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the years ended December 31, 2023 and 2022

Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Board of Directors and Stockholders of

Technologies, Inc.

the Stockholders and Board of Directors of bioAffinity Technologies, Inc.:

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of bioAffinity Technologies, Inc.

(the “Company”) as of

December 31, 2022 and 2021, the related consolidated statements of operations, changes in convertible preferred stock and

stockholders’ equity (deficit), and cash flows, for each of the two years in the period ended December 31, 2022, and the

related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31,

2022 and 2021 and the consolidated results of its operations and its cash flows for each of the two years in the period ended

December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December

31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows, for each

of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated

financial position of the Company as of December 31, 2023 and 2022 and the consolidated results of its operations and its cash flows

for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United

States of America.

accompanying consolidated financial statements have been prepared assuming that the entity will continue as a going concern.

in Note 1 to the consolidated financial statements, the entity has incurred recurring losses from operations and expects to continue

to incur operating losses that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in

regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

23 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

WithumSmith+Brown, PC

/s/ WithumSmith+Brown,

have served as the Company’s auditor since 2021.

York, New York

PCAOB ID Number 100

April 1, 2024

ID Number 100

Technologies, Inc.

1 unchanged sentence

Current assets:

Cash and cash equivalents

Accounts and other receivables, net

Prepaid expenses and other current assets

cash equivalents

Accounts and other receivables,

expenses and other current assets

Total current assets

Deferred offering costs

Property and equipment, net

LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)

Non-current assets:

Property and equipment,

Operating lease right-of-use

Finance lease right-of-use

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

1 unchanged sentence

Accrued expenses

Accrued interest

Current portion of Paycheck Protection Program loan

Convertible notes payable at fair value

Unearned revenue

Operating lease liability,

current portion

Finance lease liability,

current portion

Total current liabilities

Paycheck Protection Program loan, less current portion

Non-current liabilities

Operating lease liability,

net of current portion

lease liability, net of current portion

Total liabilities

Commitments and contingencies (See Note

Convertible preferred stock, par value $ 0.001 per share;

20,000,000 shares authorized;

0 and 756,558 shares issued and outstanding, aggregate liquidation preference of $ 0 and $ 5,825,648 at December 31, 2022 and 2021, respectively

Stockholders’ equity (deficit):

Preferred stock, no shares issued or outstanding at December 31, 2022 and 2021, respectively

Common Stock, par value $ 0.007 per share;

14,285,714 shares authorized;

8,381,324 and 2,677,140 shares issued and outstanding as of December 31, 2022 and 2021, respectively

Stockholders’ equity:

Preferred stock, no

shares issued or outstanding at December 31, 2023 and 2022, respectively

Common stock, par value

$ 0.007 per share;

25,000,000 and 14,285,714 shares authorized;

9,394,610 and 8,381,324 shares issued and outstanding as of December

31, 2023 and 2022, respectively

Additional paid-in capital

Accumulated deficit

( 44,604,479 )

( 36,667,468 )

Total stockholders’ equity (deficit)

( 15,790,719 )

Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)

stockholders’ equity

Total liabilities and

stockholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Statements of Operations

For the Years Ended December 31, 2022 and 2021

Cost of sales

the Years Ended December 31, 2023 and 2022

Operating expenses:

Direct costs and expenses

Research and development

Clinical development

Selling, general and administrative

Total operating expenses

Loss from operations

Selling, general and

administrative

and amortization

operating expenses

from operations

( 7,973,228 )

4 unchanged sentences

( 2,532,640 )

( 1,001,854 )

Gain on extinguishment of debt

Fair value of warrants issued

( 4,080,339 )

Fair value adjustments on convertible notes payable

Other Expense

Gain on extinguishment

value adjustments on convertible notes payable

( 1,866,922 )

Loss before income taxes

before income taxes

( 7,916,018 )

7 unchanged sentences

Technologies, Inc.

Statements of Changes in Convertible preferred stock and Stockholders’ Equity (Deficit)

For the Years Ended December 31, 2022 and

Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity

the Years Ended December 31, 2023 and 2022

Stockholders’

Preferred Stock

Balance at December 31, 2021

1 unchanged sentence

$ ( 15,790,719 )

Stock-based compensation expense

Stock-based compensation

Fair value of warrants issued

1 unchanged sentence

Debt discount for warrants issued

( 6,326,413 )

Common stock issued upon initial public offering,

net of underwriters’ commission and offering costs of $ 1.8 million

Common stock issued on conversion of convertible

preferred stock

$ ( 4,044,318 )

Balance at December 31, 2021

Common stock issued on conversion of notes

Exercise of warrants

Exercise of stock options

( 8,154,113 )

Stock-based compensation expense

Beneficial conversion feature for bridge notes

Return of capital from stock split

Debt discount for warrants issued

Common stock issued upon initial public offering, net of underwriters’ commission and offering costs of $ 1.8 million

Common stock issued on conversion of convertible preferred stock

Balance at December 31, 2022

( 36,667,468 )

Common stock issued on conversion of notes payable

Exercise of warrants

Exercise of stock options

Stock-based compensation

Stock issued in connection with the acquisition

( 7,937,011 )

5 unchanged sentences

Statements of Cash Flows

For the Years Ended December 31, 2022 and 2021

Cash flows from operating activities

the Years Ended December 31, 2023 and 2022

Cash flows from operating

$ ( 7,937,011 )

$ ( 8,154,113 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net

cash used in operating activities:

Depreciation and amortization

Accretion of debt issuance costs

Fair value adjustments on convertible notes payable

Stock-based compensation expense

Fair value of warrants issued

Gain on extinguishment of debt

Accretion of debt issuance

Fair value adjustments

on convertible notes payable

Stock-based compensation

Fair value of warrants

Gain on extinguishment

Changes in operating assets and liabilities:

Accounts and other receivables

Prepaid expenses and other assets

Prepaid expenses and

Accounts payable

Accrued expenses

Unearned revenue

Accrued interest

Net cash used in operating activities

lease right-of-use asset

cash used in operating activities

( 6,037,806 )

( 4,070,845 )

Cash flows from investing activities

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Cash flows from investing

Purchase of property

and equipment

net of cash acquired

( 2,186,497 )

cash used in investing activities

( 2,209,399 )

Cash flows from financing

Proceeds from loan payable

Payment on loans payable

Proceeds from issuance of convertible notes payable

Repayment of convertible loan payable

Proceeds from issuance of common stock from the initial public offering, net of underwriting discounts, commissions and offering expenses of approximately $ 1.8 million

Proceeds from issuance

of convertible notes payable

Repayment of convertible

Proceeds from issuance

of common stock from the initial public offering, net of underwriting discounts, commissions and offering expenses of approximately

$ 1.8 million

Exercise of warrants

Exercise of stock options

Return of capital from stock split

Payment of debt issuance costs

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental disclosures of cash flow information:

Income taxes paid in cash

Return of capital from

Payment of debt issuance

repayments on finance leases

cash provided (used) by financing activities

Net increase (decrease)

in cash and cash equivalents

( 8,592,189 )

Cash and cash equivalents

at beginning of year

and cash equivalents at end of year

Supplemental disclosures

of cash flow information:

Income taxes paid in

Interest paid

Conversion of convertible preferred stock into common stock

Conversion of convertible notes payable into common stock

Fair value of warrants issued to placement agents

Beneficial conversion feature for bridge notes

Noncash investing activities:

Stock issuance in connection

with the acquisition

Noncash financing activities:

Conversion of convertible

preferred stock into common stock

Conversion of convertible

notes payable into common stock

Fair value of warrants

issued to placement agents

Beneficial conversion

feature for bridge notes

accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

Technologies, Inc., a Delaware corporation (the “Company,” “we,” or “our”), addresses the need for

noninvasive diagnosis of early-stage cancer and diseases of the lung and for targeted cancer treatment.

The Company develops proprietary

noninvasive diagnostic tests and cancer therapeutics using technology that preferentially targets cancer cells and cell populations indicative

of a diseased state.

Our first diagnostic test, CyPath ® Lung, is a noninvasive test for early detection of lung cancer,

Technologies, Inc., a Delaware corporation (the “Company,” or “bioAffinity Technologies”), addresses the need

for noninvasive diagnosis of early-stage cancer and diseases of the lung.

The Company also is conducting early-stage research focused

on advancing therapeutic discoveries that could result in broad-spectrum cancer treatments.

bioAffinity Technologies develops proprietary

noninvasive diagnostic tests using technology that preferentially targets cancer cells and cell populations indicative of a diseased

The Company’s first diagnostic test, CyPath ® Lung, is a noninvasive test for early detection of lung cancer,

the leading cause of cancer-related deaths.

Research and optimization of our proprietary platform for in vitro diagnostics and

technologies are conducted in our laboratories at The University of Texas at San Antonio.

We are developing our platform technologies

so that, in the future, they will be able to detect, monitor, and treat diseases of the lung and other cancers.

CyPath ® Lung is offered for sale to physicians by the Company’s subsidiary,

Precision Pathology Laboratory Services, LLC (“PPLS”).

Research and optimization of the Company’s proprietary platform

for in vitro diagnostics and technologies are conducted in laboratories at The University of Texas at San Antonio and PPLS.

is developing its platform technologies so that in the future they will be able to detect, monitor, and treat diseases of the lung and

other cancers.

and Initial Public Offering

1 unchanged sentence

2016, the Company formed a wholly owned subsidiary, OncoSelect ® Therapeutics, LLC, as a Delaware limited liability company.

September 6, 2022, the Company completed its initial public offering (the “IPO”) of 1,282,600

units (the “Units”) at an offering price of $ 6.125

per Unit (the “Offering Price”).

Unit consists of (i) one share of the Company’s common stock, par value $ 0.007

per share (“Common Stock”), (ii) one tradeable warrant (a “Tradeable Warrant”) exercisable for the purchase

of one share of Common Stock at an exercise price of $ 7.35

per share, and (iii) one non-tradeable warrant (a “Non-tradeable Warrant”) exercisable for the purchase of one share of

Common Stock at an exercise price of $ 7.656

The sale of Units in the IPO generated gross proceeds to the Company of approximately $ 7.8

million before deducting underwriting discounts, commissions, and other offering expenses.

The Company intends to use the net

proceeds from the Offering for working capital and for general corporate purposes, including product and test development, sales,

general and administrative matters, and capital expenditures.

connection with the closing of the IPO, the Company converted 5,296,044

shares of the convertible preferred stock into 756,558

shares of Common Stock.

Additionally, the Company converted approximately $ 16.1

million in convertible notes, Bridge Notes, and related accrued interest into 2,533,964

Common Stock.

June 2022, the Company completed a 1-for-7 reverse stock split of its Common Stock.

All share and per share amounts have been adjusted

on a retroactive basis in these consolidated financial statements to reflect the effect of the reverse stock split.

the stock split resulted in the par value of the Company’s Common Stock increasing to $ 0.007 per share.

On August 14, 2023, the Company formed a wholly owned subsidiary, PPLS, as a Texas limited liability company, to acquire the assets of

Village Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, including the clinical pathology

laboratory it owned.

of Presentation

consolidated financial statements of the Company have been prepared in accordance with U.S.

accounting principles generally accepted

accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties About an Entity’s Ability

to Continue as a Going Concern (Subtopic 205-40), 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.

generally accepted accounting principles

(“GAAP”) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

Going Concern

accordance with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements – Going Concern

(Subtopic 205-40), 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.

Company has incurred significant losses and negative cash flows from operations since inception and expects to continue to incur losses

1 unchanged sentence

As a result, the Company had an accumulated deficit of $ 44.6 million at December

Our cash and cash equivalents at December 31, 2022 were approximately $ 11.4 million, representing 93 % of our total assets.

Based on our current expected level of operating expenditures, the Company believes its cash on hand at December 31, 2022, is sufficient

to fund the Company’s ongoing operations for a period of a least twelve (12) months subsequent to the issuance of the accompanying

consolidated financial statements.

Thereafter, the Company may need to raise further capital through the sale of additional equity or

debt securities or other debt instruments, strategic relationships or grants, or other arrangements to support its future operations.

If such funding is not available or not available on terms acceptable to the Company, the Company’s current development plan may

be curtailed.

rapid global spread of the COVID-19 virus since December 2019 has affected production and sales, and disrupted supply chains across a

range of industries.

The impact of COVID-19 on the Company’s operations and financial performance will depend on numerous factors,

including but not limited to the duration and spread of the virus and the impact on the Company’s customers, employees, clinical

trial sites, and vendors.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

the COVID-19 pandemic continues to evolve, the ultimate impact of the pandemic on the Company’s operations is highly uncertain

and subject to change and will depend on future developments, which cannot be accurately predicted, including the duration of the pandemic,

additional or modified government actions, and the actions taken to contain COVID-19 or address its impact, among others.

does not yet know the full extent of potential delays or impacts on the Company, clinical trials, research programs, healthcare systems,

or the global economy, but continues to monitor the situation closely.

The Company’s cash and cash equivalents at December 31, 2023, were approximately $ 2.8 million, representing 34 % of total

Based on the Company’s current expected level of operating expenditures and the cash and cash equivalents on hand at December

31, 2023, 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.

Therefore, the

Company may need to raise further capital through the sale of additional equity or debt securities or other debt instruments, strategic

relationships or grants, or other arrangements to support its future operations.

If such funding is not available or not available on

terms acceptable to the Company, the Company’s current development plan may be curtailed.

On March 8, 2024, the Company issued

to certain investors, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) (1) 1,600,000 shares of the

Company’s common stock (the “Shares”), par value $ 0.007 per share (“Common Stock”) in a registered direct

offering, and (2) 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 direct offering resulted in net proceeds of $ 2.05 million.

Furthermore, an alternative

source of funding to the sale of additional equity or debt securities is the exercising of outstanding warrants.

No adjustments have

been made to the presented consolidated financial statements as a result of this uncertainty.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Actual results could differ from those estimates.

Significant estimates include:

the fair value of the Company’s Common Stock used to measure stock-based compensation for options

granted to employees and nonemployees;

the valuation allowance on the Company’s deferred tax assets;

and the fair value of the

convertible notes payable.

Significant estimates include the valuation allowance on the Company’s deferred tax assets, stock-based compensation, valuation

of goodwill and intangible assets related to the business combination, allowance for contractual adjustments and discounts related to

service revenues, and the useful lives of fixed assets.

of Consolidation

accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary, Oncoselect

Therapeutics, LLC.

All significant intercompany balances and transactions have been eliminated in consolidation.

Company’s consolidated financial statements reflect its financial statements, those of its wholly owned subsidiaries and certain

variable interest entities where the Company is the primary beneficiary.

The accompanying consolidated financial statements include all

the accounts of the Company, its wholly owned subsidiaries, OncoSelect ® Therapeutics, LLC and PPLS, and the variable interest

entity, Village Oaks.

All significant intercompany balances and transactions have been eliminated.

determining whether the Company is the primary beneficiary of a variable interest entity, it applies a qualitative approach that determines

whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses

of, or the right to receive benefits from, the entity that could potentially be significant to that entity.

The Company continuously

assesses whether it is the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions

may result in the Company consolidating or deconsolidating one or more of its collaborators or partners.

September 18, 2023, the Company, in connection with the Asset Purchase Agreement it entered into with Village Oaks (the “Seller”)

Joyce, M.D., dated September 18, 2023, acquired substantially all the assets and assumed certain liabilities of Village Oaks

in exchange for total consideration of $ 3,500,000 ,

which consists of:

million in cash paid at closing and (2) 564,972

shares of the Company’s common stock valued

The assets purchased included

a clinical pathology laboratory regulated by the Centers for Medicare and Medicaid Services (“CMS”) and accredited by the

College of American Pathologists (“CAP”) and certified under the Clinical Laboratory Improvement Amendments (“CLIA”)

The primary reason for the acquisition is control of the laboratory in which CyPath® Lung is ordered and processed.

Company recognized goodwill of $ 1,404,000 arising from the acquisition.

The acquisition is being accounted for as a business combination

in accordance with ASC 805.

The Company has determined the preliminary fair values of the accounts receivables, accounts payable and

accrued expenses that make up the majority of the net working capital assumed in the acquisition.

These values are subject to change

as the Company performs additional reviews of its assumptions utilized.

following table summarizes the purchase price and preliminary purchase price allocations relating to the acquisition:

SCHEDULE OF PURCHASE PRICE AND PRELIMINARY PURCHASE PRICE ALLOCATIONS

purchase consideration

Net working capital (including

Property and equipment

Customer relationships

Trade names and trademarks

represents the excess fair value after the allocation to the identifiable net assets.

The calculated goodwill is not deductible for tax

Consolidated unaudited pro-forma operating results as if the business combination began on January 1, 2022 are net revenues of $ 7.9 million

and $ 6.9 million, net loss of ($ 8.6 million) and ($ 8.6 million), and loss per share of ($ 0.99 ) and ($ 1.91 ) for years ended 2023 and 2022,

respectively.

preliminary purchase price allocations relating to the acquisition previously reported in the 10-Q filed, October 14, 2023, reported

Net Working Capital of $ 1,167,000 and Goodwill of $ 1,149,000 .

The amounts have been updated to reflect the purchase price adjustments

to accounts payable and accounts receivable that existed at the time of the acquisition.

The company incurred approximately $ 811,000 in acquisition costs.

and Cash Equivalents

4 unchanged sentences

Concentration

The Company has significant cash balances at financial institutions which

throughout the year regularly exceed the federally insured limit of $ 250,000 .

Any loss incurred or a lack of access to such funds could

have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Accounts and Other Receivables, Net

Accounts and other receivables, net consists of amounts

invoiced to Precision Pathology Services (“Precision Pathology”), a CAP-accredited, CLIA-certified clinical pathology laboratory

and our licensee for royalties from sales of our first diagnostic test, CyPath® Lung.

The allowance for doubtful accounts is based on forecasted losses and a

review on a specific identification basis of the collectability of outstanding receivables.

As of December 31, 2022 and 2021, there is

no allowance for doubtful accounts.

Expenses and Other Assets

expenses and other assets consist of prepaid insurance, maintenance contracts, dues, and legal retainers, etc.

Expense is calculated

using the straight-line method over the estimated useful lives of the respective term of service.

Offering Costs

Company capitalizes certain legal, accounting, and other third-party fees that are directly related to the Company’s equity financings,

including its IPO, until such financings are consummated.

After consummation of the equity financing, these costs are recorded as a reduction

of the proceeds received as a result of the financing.

The Company capitalized certain legal, accounting, and other third-party fees

that were directly related to the Company’s IPO.

After the completion of the IPO in September 2022, total deferred offering costs

of approximately $ 1.8 million were offset against the proceeds from the IPO and reclassified to additional paid-in capital in the accompanying

consolidated balance sheets.

At December 31, 2021, deferred offering costs totaling approximately $ 8,000 were included as non-current assets

in the accompanying consolidated balance sheet.

and Equipment, Net

and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation is calculated using the straight-line method

over the estimated useful lives of the respective assets, generally three ( 3 ) years.

and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets

may not be recoverable.

The Company recognizes an impairment charge in the event the net book value of such assets exceeds the future

undiscounted cash flows attributable to the asset group.

No impairment losses were incurred during the years ended December 31, 2022

Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit

of $ 250,000 .

Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial

condition, results of operations, and cash flows.

Company expenses all advertising costs as incurred.

Advertising expenses were approximately $ 89,000 and $ 39,000 for the years ended December

31, 2023, and 2022, respectively.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

related to filing and pursuing patent applications, as well as costs related to maintaining the Company’s existing patent portfolio,

are recorded as expenses as incurred since recoverability of such expenditures is uncertain.

Compensation Expense

expense related to stock options granted to employees and non-employees is measured at the grant date based on the estimated fair value

of the award and is recognized on a straight-line basis over the requisite service period.

Forfeitures are recognized as a reduction

of stock-based compensation expense as they occur.

The Company estimates the fair value of stock option grants using the Black-Scholes

option pricing model.

Black-Scholes option pricing model used to compute share-based compensation expense requires use of accounting judgment and financial

Items requiring estimation include the expected term option holders will retain their vested stock options before exercising

them and the estimated volatility of the Company’s Common Stock price over the expected term of a stock option.

Application of

alternative assumptions could result in different share-based compensation amounts being recorded in the financial statements.

11 for additional disclosures related to stock-based compensation.

Advertising expense

The Company expenses all advertising costs as incurred.

Advertising expense

was approximately $ 3,000 for the year ended December 31, 2022.

There were no advertising expenses for the year ended December 31, 2021.

loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of the Company’s

Common Stock, par value $0.007 per share outstanding during the period.

Diluted loss per share is computed by dividing net loss attributable

to common stockholders by the sum of the weighted-average number of shares of Common Stock outstanding during the period and the weighted-average

number of dilutive Common Stock equivalents outstanding during the period, using the treasury stock method.

Dilutive Common Stock equivalents

are comprised of in-the-money stock options, convertible notes payable, and warrants based on the average stock price for each period

using the treasury stock method.

following potentially dilutive securities have been excluded from the computations of weighted average shares of Common Stock outstanding

as of December 31, 2023 and 2022, as they would be anti-dilutive:

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

of December 31,

Shares underlying options outstanding

Shares underlying warrants outstanding

Anti-dilutive

Post-acquisition

of PPLS, additional revenue streams have been consolidated starting September 19, 2023.

PPLS generates three sources of revenue:

patient service fees, (2) histology service fees, and (3) medical director fees.

The revenue is recognized on the date of service (meeting

the performance requirement of ASC 606).

Pre-acquisition, bioAffinity’s revenue was generated in three ways pre-acquisition:

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.

determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, Revenue from Contracts

with Customers , the Company performs the following five steps:

(1) identify the contract(s) with a customer, (2) identify the performance

obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in

the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

SCHEDULE OF REVENUE RECOGNITION

of December 31,

Patient service

Histology service fees

Medical director fees

Department of Defense observational studies

Other revenues 2

1 Patient services

fees includes direct billing for CyPath® Lung diagnostic test.

2 Other revenues

include pre-acquisition CyPath® Lung royalty income and laboratory services.

Reclassifications

prior year balances have been reclassified to conform to current year presentation.

The Company reclassified legal fees and annuity costs

relating to patents of approximately $ 236,000 from research and development to selling, general and administrative for the year ended

December 31, 2022, respectively, as these expenses are not deemed research and development.

and Equipment, Net

accordance with ASC 360-10, Accounting for the Impairment of Long-Lived Assets , the Company periodically reviews the carrying

value of its long-lived assets, such as property, equipment, and definite lived intangible assets, to test whether current events or

circumstances indicate that such carrying value may not be recoverable.

When evaluating assets for potential impairment, the Company

compares the carrying value of the asset to its estimated undiscounted future cash flows.

If an asset’s carrying value exceeds

such estimated cash flows (undiscounted and with interest charges), the Company records an impairment charge for the difference.

Company did not record any impairment for the years end December 31, 2023, or 2022.

and equipment are carried at cost, net of accumulated depreciation.

Depreciation is computed using the straight-line method over the

estimated useful life of the asset.

Amortization of leasehold improvements is computed using the shorter of the lease term or estimated

useful life of the asset.

Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred.

lives of each asset class are as follows:

SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE

of lease term or useful life

assets, net of accumulated amortization, are summarized as follows as of December 31, 2023:

SCHEDULE OF INTANGIBLE ASSETS ADJUSTMENTS

Date Acquired

Trade names and trademarks

Customer relationships

Total Intangible Assets

the year ended December 31, 2023, amortization of intangible assets totaled $ 16,528 compared to $ 0 in the prior year comparative periods.

Accounting Pronouncements

Company continues to monitor new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) and

does not believe any accounting pronouncements issued through the date of this Annual Report will have a material impact on the Company’s

consolidated financial statements.

Company adopted FASB issued Accounting Standards Update (ASU) No.

2016-13, accounting considerations of Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“CECL”) on September 18, 2023, with the

business combination of Village Oaks and PPLS.

The Company has patient service fees that are billed to commercial insurance companies,

governmental payors, and patients.

Under the CECL model, the Company estimates potential credit losses from the patient service fees

billed using historical data.

Company adopted FASB issued Accounting Standards Update (ASU) No.

2016-02, Leases (Topic 842) on January 1, 2022, with the business combination

of Village Oaks and PPLS.

The Company has one operating lease for its real estate and office space and multiple finance leases for lab

equipment in Texas that was acquired through the September 18, 2023, Acquisition.

taxes are accounted for under the asset and liability method.

13 unchanged sentences

31, 2023 and 2022, and the Company had no accruals for interest and penalties at December 31, 2023 or 2022.

revenue is generated exclusively from royalties for our first diagnostic test, CyPath ® Lung, from sales by Precision Pathology that began a limited market launch in the

second quarter of 2022 to pulmonologists in the San Antonio, Texas, area designed to refine future positioning and develop strategic

insight for our CyPath ® Lung test.

The services are completed upon release of a patient’s test result to the ordering

healthcare provider.

determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, Revenue from Contracts

with Customers, the Company performs the following five steps:

(1) identify the contract(s) with a customer, (2) identify the performance

obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in

the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

earnings (loss) per share is computed by dividing net income (loss) attributable to Common stockholders by the weighted-average number

of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net income attributable to Common

stockholders by the sum of the weighted-average number of common shares outstanding during the period and the weighted-average number

of dilutive common share equivalents outstanding during the period, using the treasury stock method.

Dilutive common share equivalents

are comprised of in-the-money stock options, convertible notes payable, and warrants, based on the average stock price for each period

using the treasury stock method.

The following potentially dilutive securities have been excluded from the computations of weighted average

shares outstanding as of December 31, 2022 and 2021, as they would be anti-dilutive:

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Year Ended December 31,

Convertible preferred stock

Shares underlying options outstanding

Shares underlying warrants outstanding

Shares underlying convertible notes outstanding

Anti-dilutive

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Company is organized as a single operating segment, whereby its chief operating decision maker assesses the performance of and allocates

resources to the business as a whole.

Value of Financial Instruments

and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level

of judgment associated with the inputs used to measure their fair values.

Fair value is defined as the exchange price that would be

received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for

the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to

measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

three-tier fair value hierarchy for disclosure of fair value measurements is as follows:

1 inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities and have the highest priority.

2 valuations are based on quoted prices in markets that are not active.

3 valuations are based on inputs that are unobservable and supported by little or no market activity.

Note 7 for the fair value hierarchy table and inputs used in the fair value measurement for assets and liabilities.

Company is organized in two operating segments, Diagnostic Research and Development (R&D) and Laboratory Services, whereby its chief

operating decision maker (“CODM”) assesses the performance of and allocates resources.

The CODM is the Chief Executive Officer.

Diagnostic R&D includes research and development and clinical development on diagnostic tests.

Any revenues assigned to Diagnostic

R&D are proceeds received from observational studies.

Laboratory services include all the operations from Village Oaks and PPLS in

addition to sales and marketing costs of CyPath® Lung from bioAffinity.

SCHEDULE OF SEGMENT INFORMATION

of December 31,

Net revenues:

Operating expenses:

Diagnostic R&D

( 1,724,597 )

( 1,524,170 )

Laboratory services

( 3,769,783 )

corporate activities

( 5,011,347 )

( 2,396,650 )

operating loss

( 7,973,228 )

( 4,011,058 )

Non-operating

income (expense), net

( 4,140,596 )

Net loss before income taxes

( 7,916,018 )

( 8,151,654 )

$ ( 7,937,011 )

$ ( 8,154,113 )

and Development

2 unchanged sentences

expenditures for lab operations, preclinical studies, compensation, and consulting costs.

Company incurred research and development expenses of $ 1.1

million and $ 1.0 million

for the years ended December 31, 2022 and 2021, respectively.

Company incurred research and development expenses of $ 1.5 million and $ 1.4 million for the years ended December 31, 2023 and 2022, respectively.

Research and Development Costs

10 unchanged sentences

between accrued costs and actual costs incurred since its inception.

imposed by federal, state, and local authorities in the United States are a significant factor in providing medical care.

In the United

States, drugs, biological products, and medical devices are regulated by the United States Food, Drug and Cosmetic Act, which is administered

Food and Drug Administration (“FDA”) and the Center for Medicare and Medicaid.

The Company has not yet obtained

marketing authorization from the FDA but is able to market its CyPath® Lung test as a Laboratory Developed test licensed to and sold

by Precision Pathology Services, a CAP-accredited, CLIA-certified clinical pathology laboratory.

Reclassifications

prior year balances have been reclassified to conform to current year presentation.

The Company reclassified patent and annuity costs of approximately $ 236,000 and $ 188,000 from research and development

to selling, general and administrative for the years ended December 31, 2022, and 2021, respectively.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Issued Accounting Pronouncements

December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (ASU 2019-12).

ASU 2019-12 removes certain exceptions

to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistency in application.

will be effective for public entities for interim and annual periods beginning after December 15, 2020, with early adoption permitted.

The Company adopted ASU 2019-12 and concluded there is no impact on the Company’s consolidated financial statements.

August 2020, the FASB issued ASU No.

2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and

Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity, which simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded

conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic

815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital.

By removing the separation

model, a convertible debt instrument will be reported as a single liability instrument with no separate accounting for embedded conversion

This new standard also removes certain settlement conditions that are required for contracts to qualify for equity classification

and simplifies the diluted earnings per share calculations by requiring that an entity use the if-converted method and that the effect

of potential share settlement be included in diluted earnings per share calculations.

The new standard will be effective for fiscal years

beginning after December 15, 2023, for smaller reporting companies.

As the Company currently does not have debt with conversion and other

options, the Company does not believe the adoption will have a material impact on our consolidated financial statements.

EXPENSES AND OTHER CURRENT ASSETS

imposed by federal, state, and local authorities in the U.S.

are a significant factor in providing medical care.

In the U.S., drugs,

biological products, and medical devices are regulated by FDCA, which is administered by the FDA and the Centers for Medicare and Medicaid

The Company has not yet obtained marketing authorization from the FDA but is able to market its CyPath® Lung test as a

laboratory developed test sold by Precision Pathology Laboratory Services, a CAP-accredited, CLIA-certified clinical pathology laboratory

and wholly owned subsidiary.

ACCOUNTS AND OTHER RECEIVABLES, NET

and other receivables at December 31, 2023 and 2022, are summarized below:

SCHEDULE OF ACCOUNTS RECEIVABLE

Patient service fees

Histology service fees

Medical director fees

Other receivables

accounts and other receivables, net

PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets at December 31, 2023 and 2022, are summarized below:

2 unchanged sentences

Legal and professional

Total prepaid expenses and other current assets

AND EQUIPMENT, NET

Total prepaid expenses

and other current assets

PROPERTY AND EQUIPMENT, NET

and equipment at December 31, 2023 and 2022, are summarized below:

2 unchanged sentences

Computers and software

and equipment, gross

accumulated depreciation and amortization

Total property and equipment, net

and amortization expense was $ 10,182 and $ 4,817 for the years ended December 31, 2022, and 2021, respectively.

Leasehold improvements

Property and equipment, gross

depreciation and amortization

property and equipment, net

Property and equipment depreciation expense was $ 233,064 and $ 10,182 for the years ended December 31, 2023, and 2022,

respectively.

ACCRUED EXPENSES

expenses at December 31, 2023 and 2022, are summarized below:

OF ACCRUED EXPENSES

SCHEDULE OF ACCRUED EXPENSES

Legal and professional

Total accrued expenses

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided stimulus measures, including the Paycheck Protection

Program (“PPP”), to provide certain small businesses with liquidity to support their operations during the COVID-19 pandemic.

April 2020, the Company received an initial $ 0.2 million PPP Loan (the “PPP Loan”) bearing interest at a one percent ( 1 %)

fixed annual rate, with a maturity date of two years , and was eligible for forgiveness under certain conditions.

In October 2020, the

Company submitted an application for forgiveness with its lender.

In June 2021, the Company received forgiveness from the SBA and recorded

a gain of $ 239,000 on the extinguishment of debt in the accompanying consolidated statements of operations.

March 2021, the Company received a second PPP Loan for $ 0.2 million bearing interest at a one percent ( 1 %) fixed annual rate, and will

mature in five years , and is eligible for forgiveness under certain conditions.

In April 2022, the Company received notice the loan was

forgiven by the SBA and recorded a gain of $ 212,000 on the extinguishment of debt in the accompanying consolidated statements of operations.

September 2022, the Company obtained short-term financing of approximately $ 0.5 million with ten monthly payments of approximately $ 42,000

and interest at a 4.3 % fixed annual rate for director and officer insurance policies.

accrued expenses

UNEARNED REVENUE

Company engaged in an observational study of CyPath ® Lung with the DOD.

A total of 70 CyPath ® Lung units

were ordered and shipped.

However, in compliance with FASB ASC 606, the performance obligation was complete for only 25 units as of December

The performance obligation is deemed complete after samples have been collected and processed and results analyzed.

revenue balance amounted to $ 33,058 and $ 0 as of December 31, 2023, and 2022, respectively.

FAIR VALUE MEASUREMENTS

Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s

(“FASB”) accounting standard for such instruments.

Under this standard, financial assets and liabilities are classified in

their entirety based on the lowest level of input that is significant to the fair value measurement.

estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid and other expenses,

accounts payable, and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term

nature of these instruments.

There are no assets and liabilities that are measured at fair value at

December 31, 2022.

The table below summarizes the Company’s assets and liabilities that are measured at fair value at

December 31, 2021:

SCHEDULE OF FAIR VALUE INSTRUMENTS

Fair value measured at December 31, 2021

Quoted Prices

Convertible notes payable

description of the valuation techniques and the values used for significant unobservable inputs to derive fair value measurements for

those assets and liabilities measured at fair value at December 31, 2021:

SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES

Valuation technique

Unobservable Input

Company analyzes all financial instruments with features of both liabilities and equity under the FASB accounting standard for such instruments.

Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant

to the fair value measurement.

estimated fair value of certain financial instruments, including cash and cash equivalents, accounts and other receivables, prepaid and

other current assets, accounts payable, accrued expenses, and loan payable, are carried at historical cost basis, which approximates

their fair values because of the short-term nature of these instruments.

Company has one operating lease for its real estate and office space and multiple finance leases for lab equipment in Texas that was

acquired through the September 18, 2023, Acquisition.

The operating lease has a remaining lease term of 3.58 years as of December 31,

The Company has finance leases consisting of office and lab equipment with remaining lease terms ranging from approximately 2.25

to 4.0 years as of December 31, 2023, for which the Company has determined that it will use the equipment for a major part of its remaining

economic life.

lease agreements generally do not provide an implicit borrowing rate.

Therefore, the Company used a benchmark approach as of December

31, 2023, to derive an appropriate incremental borrowing rate to discount remaining lease payments.

The Company benchmarked itself against

other companies of similar credit ratings and comparable quality and derived imputed interest rates ranging from 7.97 % to 8.13 % for the

lease term lengths.

with an initial term of 12 months or less are not recorded on the balance sheet.

There are no material residual guarantees associated

with any of the Company’s leases, and there are no significant restrictions or covenants included in the Company’s lease

Certain leases include variable payments related to common area maintenance and property taxes, which are billed by the landlord,

as is customary with these types of charges for office space.

The Company has not entered into any lease arrangements with related parties,

and the Company is not the sublessor in any arrangement.

Company’s existing leases contain escalation clauses and renewal options.

The Company has evaluated several factors in assessing

whether there is reasonable certainty that the Company will exercise a contractual renewal option.

For leases with renewal options that

are reasonably certain to be exercised, the Company included the renewal term in the total lease term used in calculating the right-of-use

asset and lease liability.

Prior to adoption of ASU 2016-02 effective January 1, 2022, the Company accounted for operating lease transactions

by recording lease expense on a straight-line basis over the expected term of the lease.

components of lease expense, which are included in selling, general and administrative expense and depreciation and amortization for

the year ended December 31, 2023, and 2022 are as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

of lease expense:

Amortization of right-of-use assets

- finance lease

Interest on lease liabilities - finance lease

Operating lease cost

Total lease cost

SCHEDULE OF BALANCE SHEET INFORMATION RELATING TO LEASES

lease right-of-use, assets

Operating lease liability, current

Operating lease liability,

Total operating lease

Financing lease right-of-use assets,

Accumulated amortization

Finance lease right-of-use

Financing lease liability, current

Financing lease liability,

Weighted-average

Convertible notes payable at 12/31/21

Probability weighting assigned to automatic and optional conversion scenarios

Applied discount rate

Common share class volatility

Preferred stock class volatility

Negotiation discount

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Company transferred $ 325,000 of convertible notes payable from level 3 to level 2 during the year ended December 31, 2022, to account

for notes that were not converted at the time of the Company’s IPO.

During the fourth quarter of 2022, these notes, together with

the related accrued interest, were repaid in full.

There were no transfers into or out of level 3 during the year ended December

The Company issued a total of $ 0.7 million and $ 3.3 million in convertible notes for the years ended December 31, 2022, and

2021, respectively, which are included in level 3 liabilities.

The following table summarizes the fair values of convertible note payables

and the change in fair value at each measurement date:

SCHEDULE OF CHANGE IN FAIR VALUE

Fair value of convertible notes payable at December 31, 2020

Convertible notes payable issued

Debt discount for warrants issued

( 1,665,956 )

Accretion of debt issuance costs

Change in fair value of convertible notes payable

Fair value of convertible notes payable at December 31, 2021

Additional convertible notes payable issued

Repayment of convertible notes payable

Debt discount for warrants issued

Accretion of debt issuance costs

Change in fair value of convertible notes payable

Transfer from level 3 to level 2

Conversion of convertible notes payable into common stock

( 14,503,455 )

Fair value of convertible notes payable at December 31, 2022

CONVERTIBLE NOTES PAYABLE

September 2022, in connection with the closing of the IPO, the Company converted approximately $ 16.1

million consisting of approximately $ 9.1 million in convertible notes and Bridge Notes, related accrued interest of approximately

$ 1.6 million, and approximately $ 5.4 million of fair value adjustments into 2,533,964 shares of Common Stock.

August 2018 through July 2020, the Company issued a total of $ 5.0 million in notes payable, including $ 2.7 million to related parties,

convertible into the next class of equity securities in which the Company issues and sells equity securities with aggregate gross proceeds

of at least $ 5.0 million.

The conversion price was initially determined as seventy percent ( 70 %) multiplied by the per share purchase

price for the next equity financing.

Additionally, provided no equity financing had occurred, and the note was still outstanding, the

noteholder could have elected to convert the outstanding principal and accrued interest into shares of the Company’s Common Stock

at a price of $ 6.62 per share.

The convertible notes payable had a maturity date of December 31, 2020 , bore interest at 8 % annually,

and were secured by the intellectual property of the Company.

The Company obtained the necessary noteholder approvals to extend the maturity

date of the notes in November 2021 to May 31, 2022, and in May 2022 to August 2022.

In July 2022, the Company obtained approval from

a majority of the noteholders to extend the maturity date from August 31, 2022, to October 31, 2022, for certain Bridge Notes in exchange

for a Common Stock purchase warrant equal to the principal amount of each note divided by 10.5.

As a result, the Company issued warrants

to purchase 478,446 shares of Common Stock at a price of $ 5.25 per share.

See Note 12 for additional disclosures related to warrants.

Upon completion of the IPO, the notes automatically converted into shares of Common Stock.

Conversion of the note at the IPO closing

extinguished this security and resulted in the Company wholly owning all its intellectual property without a security interest.

October 2020 through June 2021, the Company issued a total of $ 0.9 million in notes payable, including $ 0.5 million to related parties,

convertible into the next class of equity securities in which the Company issues and sells equity securities with aggregate gross proceeds

of at least $ 5.0 million.

The conversion price was determined as eighty percent ( 80 %) multiplied by the per share purchase price for

the next equity financing.

Additionally, provided no equity financing has occurred and the note is still outstanding, the noteholder

could have elected to convert the outstanding principal and accrued interest into shares of the Company’s Common Stock at a price

of $ 6.62 per share.

The convertible notes payable bore interest at 8 % annually and had a maturity date in October 2021 .

The Company obtained

the necessary noteholder approvals to extend the maturity date of the notes in December 2021 to May 2022 and in May 2022 to August 2022.

In July 2022, the Company obtained approval from a majority of the noteholders to extend the maturity date from August 31, 2022, to October

31, 2022, for certain Bridge Notes in exchange for a Common Stock purchase warrant equal to the principal amount of each note divided

As a result, the Company issued warrants to purchase 79,795 shares of the Company’s Common Stock at a price of $ 5.25 per

See Note 12 for additional disclosures related to warrants.

Upon completion of the IPO, the $ 0.9 million of the notes automatically

converted into shares of Common Stock.

In October 2022, the Company repaid $ 100,000 for the note that was not converted at the time of

the Company’s IPO.

the second and third quarters of 2021, the Company issued a total of approximately $ 0.9 million in additional notes payable, including

$ 0.1 million to related parties, convertible into the next class of equity securities in which the Company issues and sells equity securities

with aggregate gross proceeds of at least $ 5.0 million.

The conversion price was initially determined as eighty percent ( 80 %) multiplied

by the per share purchase price for the next equity financing.

Additionally, provided no equity financing has occurred and the note was

still outstanding, the noteholder could elect to convert the outstanding principal and accrued interest into shares of the Company’s

Common Stock at a price of $ 6.62 per share.

As a result of the completion of a bridge financing sufficient to provide working capital

to complete an IPO, the notes became convertible into the Company’s equity securities on the same terms as the conversion feature

established in the bridge financing.

The convertible notes payable had a maturity date in December 2022 and bore interest at eight percent

( 8 %) annually.

Upon completion of the IPO, the notes automatically converted into shares of Common Stock.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

the fourth quarter of 2021 and until our IPO in the third quarter of 2022, the Company issued a total of $ 2.6 million in Bridge Notes,

which were convertible into the Company’s Common Stock, at the time of an IPO, or at the noteholder’s option, at $ 4.20 per

share, adjusted to reflect any stock split, stock dividend, or other similar change in the Common Stock.

The Bridge Notes bore interest

at 6 % and had a maturity date of May 31, 2022 .

In May 2022, the Company obtained the necessary noteholder approvals to extend the maturity

date of the notes to August 31, 2022.

In July 2022, the Company obtained approval from a majority of the noteholders to extend the maturity

date to October 31, 2022, for certain Bridge Notes in exchange for a Common Stock purchase warrant equal to the principal amount of the

note divided by 10.5.

As a result, the Company issued warrants to purchase 758,227 shares of the Company’s Common Stock at a price

of $ 5.25 per share.

See Note 12 for additional disclosures related to warrants.

Upon completion of the IPO, approximately $ 2.3 million

of the notes automatically converted into shares of Common Stock.

In the fourth quarter of 2022, the Company repaid $ 325,000 for those

notes that were not converted at the time of the Company’s IPO.

Additionally,

each noteholder received a warrant to purchase one share of Common Stock based on the investor’s bridge note principal balance

The warrants have a five-year term at an exercise price equal to $ 5.25 per share.

In connection with the IPO, the Company

paid commissions of nine percent ( 9 %) and issued its placement agents warrants to purchase 54,464 shares of Common Stock.

issued to the Company’s placement agents have substantially the same terms as the warrants issued to our noteholders.

Company elected to account for the convertible notes payable at fair value with any changes in fair value being recognized through the

consolidated statements of operations until the convertible notes are settled.

The fair value of the convertible notes was determined

with the assistance of a third-party specialist, considering the value of the notes payable that would be received by converting into

common stock in each scenario, plus a put option.

In coordination with the Company’s IPO, the notes were converted to Common Stock.

Convertible notes payable consisted of the following:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

Secured convertible notes payable

Unsecured convertible notes payable

Principal amount of convertible notes payable

Debt issuance costs

( 1,185,382 )

Fair value adjustments on convertible notes payable

Total convertible notes payable

Company elected to account for the convertible notes payable at fair value with any changes in fair value being recognized through the

consolidated statements of operations until the convertible notes are settled.

The fair value of the convertible notes was determined

with the assistance of a third-party specialist, considering the value of the notes payable that would be received by converting into

Common Stock in each scenario, plus a put option.

remaining lease term:

Operating leases (in years)

Finance leases (in years)

Weighted-average

discount rate:

Operating leases

Finance leases

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT UNDER NON-CANCELLABLE

2027 and thereafter

Total undiscounted cash flows

Less discounting

Present value of lease

COMMITMENTS AND CONTINGENCIES

Company leases its corporate offices under a month-to-month agreement and lab space under an operating lease that is renewable annually

and expires in February 2024.

Rent expense for office and lab space amounted to approximately $ 65,000 and $ 52,000 for the years ended

December 31, 2022 and 2021, respectively.

addition to the operating lease listed in Note 9, the Company leases its corporate offices under a month-to-month agreement and leases

its laboratory and additional office space under an operating lease that is renewable annually by written notice by the Company and will

require renewal in February 2024.

Rent expense for office and lab space amounted to $ 112,124 and $ 65,043 for the years ended December

31, 2023, and 2022, respectively.

time to time, the Company is involved in various disputes and litigation matters that arise in the ordinary course of business.

the Company had no material pending legal proceedings.

CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

June 2022, the Company completed a 1-for-7 reverse stock split of its Common Stock.

All share and per share amounts have been adjusted

on a retroactive basis in these condensed consolidated financial statements to reflect the effect of the reverse stock split.

made a cash payment to stockholders for all fractional shares that it would otherwise be required to issue as a result of the stock

In addition, the stock split resulted in the par value of the Company’s Common Stock increasing to $ 0.007 per share.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Preferred Stock

Company has authorized a total of 20,000,000 shares of $ 0.001 per share par value preferred stock.

In July 2017, the Company completed

a private placement of securities in which 0.2 million shares of Series A preferred stock were sold, resulting in net proceeds of $ 1.5

As part of the closing, the Company issued 0.6 million shares in exchange for $ 2.6 million of the Company’s convertible

notes payable and related accrued interest.

accordance with the Certificate of Designation of the Series A preferred stock, all of the shares of Series A preferred stock that were

issued and outstanding at the time of the IPO were automatically converted into 756,558 fully paid and nonassessable shares of Common

Stock at a 1-for-7 conversion rate (as adjusted for the 1-for-7 reverse stock split ).

The shares of Series A preferred stock that were

so converted ceased to be part of the Company’s authorized stock and will never again be issued by the Company.

As of December 31, 2022, no preferred stock is outstanding.

Company classifies convertible preferred stock outside of stockholders’ deficit because the shares contain deemed liquidation rights

that are a contingent redemption feature not solely within the control of the Company.

The holders of the Series A preferred stock had

various rights, preferences, and privileges as follows:

share of Series A preferred stock was entitled to the number of votes equal to the number of shares of Common Stock into which each share

of Series A preferred stock could be converted at the record date for determination of the stockholders entitled to vote.

rights and powers were equal to the voting rights and powers of the Common Stock.

For so long as 30% or more of the shares of Series

A preferred stock remain outstanding, the holders of the Series A preferred stock, voting together as a single class, were entitled to

elect one director of the Company .

holders of shares of Series A preferred stock were entitled to receive dividends, when, as, and if declared by the Company’s board

of directors, out of any assets legally available therefor, prior, and in preference to any declaration of payment of any dividend on

the Company’s Common Stock at the rate of 8% per share.

The right to receive dividends was not cumulative, and no right to such

dividends would accrue to the holders of Series A preferred stock by reason of the fact that dividends on such shares are not declared

or paid in any year .

Conversion Rights

share of Series A preferred stock was convertible, at the option of the holder, at any time after the date of issuance of such share

into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Series A original issuance price

by the conversion price in effect at the time of conversion.

As of December 31, 2021, each of the 756,558 shares of Series A preferred

stock was convertible into one share of Common Stock.

The respective applicable conversion prices for the Series A preferred stock were

subject to adjustment upon any future stock split, stock dividend, combination, reclassification, or similar event affecting the convertible

preferred stock or any series thereof.

Conversion Rights

share of Series A preferred stock automatically converted into the number of shares of Common Stock determined in accordance with the

conversion rate upon the earlier of:

(a) the closing of a public offering of Common Stock at a price of at least $ 3.00 per share resulting

in at least $ 10,000,000 of gross proceeds, or (b) written consent of a majority of the holders of the then-outstanding shares of Series

A preferred stock.

the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, the holders of Series A preferred

stock were entitled to receive an amount equal to $ 7.70 per share (subsequent to the reverse-stock-split calculation) plus an additional

amount equal to any dividends declared or accrued but unpaid on each share.

If, upon such liquidation event, the assets and funds distributed

are insufficient to permit the payment to each holder of the Series A preferred stock of the full preferential amount, the entire assets

and funds legally available for distribution to the holders of Series A preferred stock would have been distributed ratably among the

holders of the Series A preferred stock based on the number of shares held.

Deemed liquidation events include the sale of the Company

or grant of an unlimited exclusive license to the Company’s technology or intellectual property rights.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Company has authorized a total of 14,285,714 shares of $ 0.007 per share par value Common Stock.

Holders of Common Stock are entitled

to cast one vote for each share held of record on all matters presented to the stockholders and have no cumulative voting rights.

of December 31, 2022, the Company has issued 8,381,324 shares of Common Stock.

November 2021, the Company received shareholder approval to increase the number of authorized shares from 7,142,857 to a total of 14,285,714

shares of $ 0.007 per share par value Common Stock.

the Company has no material pending legal proceedings.

Company has authorized a total of 25,000,000 shares of Common Stock, $ 0.007 par value per share.

On June 6, 2023, the Company received

stockholder approval to increase the number of authorized shares from 14,285,715 shares to 25,000,000 shares.

The Company has issued

9,505,255 shares of Common Stock of which 110,645 are unvested restricted stock shares as of December 31, 2023, and 8,381,324 shares

of Common Stock as of December 31, 2022.

STOCK-BASED COMPENSATION

Company grants options under its 2014 Equity Incentive Plan (the “Plan”).

The Plan is authorized to grant Incentive Stock

Options, Non-statutory Stock Options, or Restricted Stock for up to 1.1 million shares of Common Stock, or twenty percent (20%) of the

total issued and outstanding Common Stock, whichever is greater.

The Company has reserved 1.1 million shares to be under the plan.

may be granted to employees, the Company’s board of directors, and external consultants who provide service to the Company.

options have vesting schedules with terms of one to four years and become fully exercisable based on specific terms imposed at the date

The requisite service period for employees or consultants begins on the grant date and ends when the employee or consultant

ceases to be employed or providing service, unless a longer period is provided in the option agreement.

The requisite service period

for directors begins on the grant date and ends on the option term provided in the option agreement.

Options are exercisable for a period

of up to ten (10) years from grant date.

The Plan will terminate according to the respective terms of the Plan in September 2026.

Company has recorded stock-based compensation expense related to the issuance of stock option awards in the following line items in the

accompanying consolidated statements of operations:

Company grants options and restricted stock awards under its 2014 Equity Incentive Plan (the “Plan”).

Under the Plan, the

Company is authorized to grant options or restricted stock for up to 2,000,000 shares of Common Stock.

On June 6, 2023, the Company received

stockholder approval to increase the number of authorized shares from 1,142,857 to 2,000,000 .

Options or restricted stock awards may

be granted to employees, the Company’s Board of Directors, and external consultants who provide services to the Company.

and restricted stock awards granted under the Plan have vesting schedules with terms of one to three years and become fully exercisable

based on specific terms imposed at the date of grant.

The Plan will terminate according to the respective terms of the Plan in March

Company has recorded stock-based compensation expense related to the issuance of restricted stock awards in the following line items

in the accompanying consolidated statement of operations:

SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION AWARDS

Research and development

Selling, general and administrative

Total stock-based compensation expense

Selling, general

and administrative

stock-based compensation expense

following table summarizes stock option activity under the Plan:

5 unchanged sentences

Outstanding at December

Outstanding at December 31, 2022

Vested and exercisable at December 31, 2022

of December 31, 2022, there was no unrecognized compensation cost related to non-vested stock options.

the year ended December 31, 2021, the Company issued options to purchase 79,273 shares of Common Stock to employees and non-employees.

The per share weighted-average fair value of the options granted during 2021 was estimated at $ 2.23 on the date of grant.

year ended December 31, 2021, no options were exercised.

the year ended December 31, 2021, the Company issued restricted stock units (RSUs) for 7,856 shares of Common Stock to employees.

shares vest in equal monthly installments over terms of between one to three years, subject to the employee providing continuous service

through the vesting date.

The approximately 6,000 unissued shares vest over a weighted-average period of 1.7 years.

the year ended December 31, 2022, the Company issued options to purchase 7,142 shares of Common Stock to employees.

The per share weighted-average

fair value of the options granted during 2022 was estimated at $ 2.84 on the date of grant.

During the year ended December 31, 2022, 64,848

options were exercised into an equivalent number of common shares.

The company received proceeds of approximately $ 75,000 from the exercise

of the options.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

Vested and exercisable

at December 31, 2023

of December 31, 2023, there was $ 322 unrecognized compensation cost related to non-vested stock options.

the year ended December 31, 2023, no options were issued or exercised.

During the year ended December 31, 2022, the Company issued options

to purchase 7,142 shares of Common Stock to employees.

The per share weighted-average fair value of the options granted during 2022 was

estimated at $ 2.84 on the date of grant.

During the year ended December 31, 2022, 64,848 options were exercised into an equivalent number

of common shares.

The company received proceeds of approximately $ 75,000 from the exercise of the options.

following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued

15 unchanged sentences

and the contractual life of the stock-based awards.

volatility — Since the Company does not have sufficient trading history for its Common

Stock, the expected volatility is estimated based on the average volatility for comparable publicly traded biotechnology companies over

a period equal to the expected term of the stock-based awards.

The comparable companies were chosen based on their similar size, stage

in the life cycle or area of specialty.

The Company will continue to apply this process until a sufficient amount of historical information

regarding the volatility of its own stock price becomes available.

volatility — Since the Company does not have sufficient trading history for its Common Stock, the expected volatility is estimated

based on the average volatility for comparable publicly traded biotechnology companies over a period equal to the expected term of the

stock-based awards.

The comparable companies were chosen based on their similar size, stage in the life cycle, or area of specialty.

The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own

stock price becomes available.

interest rate —The risk-free interest rate is based on the U.S.

3 unchanged sentences

the Company used an expected dividend yield of zero.

account for Common Stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the

warrant agreement.

Warrants are accounted for as derivative liabilities if the warrants allow for cash settlement or provide for

modification of the warrant exercise price in the event subsequent sales of Common Stock by the Company are at a lower price per

share than the then-current warrant exercise price.

We classify derivative warrant liabilities on the consolidated balance sheet at

fair value, and changes in fair value during the periods presented in the consolidated statement of operations, which is revalued at

each consolidated balance sheet date subsequent to the initial issuance of the stock warrant.

September 2022, in connection with our IPO, we issued a total of 1,282,600 Tradeable Warrants, each exercisable for the purchase of one

share of Common Stock at an exercise price of $ 7.35 per share, and 1,282,600 Non-tradeable Warrants, each exercisable for the purchase

of one share of Common Stock at an exercise price of $ 7.656 per share.

The Common Stock and the Tradeable Warrants trade on The Nasdaq

Capital Market under the symbols “BIAF’ and “BIAFW,” respectively.

to the underwriting agreement dated August 31, 2022, (the “Underwriting Agreement”) between the Company and WallachBeth Capital,

LLC, as representative of the underwriters (the “Underwriters”), and solely for purposes of covering any over-allotments

made in connection with our IPO, we granted the Underwriters an option to purchase up to an additional 192,390 shares of Common Stock

at the Offering Price per Unit less $ 0.02 , and/or up to 192,390 Tradeable Warrants at $ 0.01 per Tradeable Warrant, and/or up to 192,390

Non-tradeable Warrants at $ 0.01 per Non-tradeable Warrant, or any combination of additional shares of Common Stock, Tradeable Warrants,

and Non-tradeable Warrants representing in the aggregate up to 15% of the number of Units sold in the IPO (the “Over-Allotment

The Over-Allotment Option was exercisable for a period of 45 days from the date of our Final Prospectus .

The Underwriters

exercised a portion of their overallotment option and purchased 110,167 Tradeable Warrants at a purchase price of $ 0.01 per warrant,

and 110,167 non-tradable warrants at a purchase price of $ 0.01 per warrant.

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

2022, 1,036,486 warrants were exercised into an equivalent number of Common Shares for proceeds of approximately $ 7.7 million.

the year ended December 31, 2021, no warrants were exercised into an equivalent number of common shares.

2022, the Company issued an additional 226,842 equity-classified Common Stock warrants.

Proceeds from the Bridge Notes were allocated

to the notes and warrants on a relative fair value basis resulting in a beneficial conversion feature (“BCF”) of $ 0.5 million

and equal to the excess fair value of the Company’s Common Stock over the effective conversion price of the Bridge Notes.

was recorded as a debt discount and is being amortized over the life of the Bridge Notes using the effective interest method.

year ended December 31, 2022, the Company recognized approximately $ 2.1 million in interest expense related to the amortization of the

debt discount and issuance costs.

October 2021 through August 2022, the Company issued approximately $ 2.7 million in convertible promissory notes (“Bridge

Notes”), which accrued interest at a rate of 6 % per year.

Originally, all principal and unpaid interest on the Bridge Notes

were due, if not settled prior, on May 31, 2022.

Each Bridge Note was issued an accompanying warrant to purchase one share

of the Company’s Common Stock for each conversion share based on the principal balance of each Bridge Note at an exercise price

equal to $ 5.25 per share.

2021, the Company issued an aggregate of 464,272 equity-classified Common Stock warrants.

Proceeds from the Bridge Notes were allocated

to the notes and warrants on a relative fair value basis resulting in a BCF of $ 0.7 million and equal to the excess fair value of the

Company’s Common Stock over the effective conversion price of the Bridge Notes.

The BCF was recorded as a debt discount and was

being amortized over the life of the Bridge Notes using the effective interest method.

For the year ended December 31, 2021, the Company

recognized $ 0.5 million in interest expense including the amortization of the debt discount.

connection with the issuance of the Bridge Notes, the Company amended the 2018 and 2020 Notes whereby upon completion of an IPO, all

outstanding principal and interest will convert into shares of the Company’s Common Stock and at $ 4.20 per share.

As an inducement

to amending the notes to extend the maturity dates until October 31, 2022, the Company issued 1,419,483 Common Stock warrants with the

same terms and conditions as the warrants issued to the Bridge Note holders.

The estimated fair value of the warrants was $ 4.1 million

and immediately expensed within the accompanying statement of operations.

following table summarizes the calculated aggregate fair values for the warrant derivative liability using the Black-Scholes method based

on the following assumptions at December 31, 2022:

SCHEDULE OF FAIR VALUE OF WARRANTS

Exercise price per share of warrant

Fair market closing price per share of Common Stock

Expected term (years)

Risk-free interest rate

1.37 - 1.62 %

Dividend yield

March 2017, the Company issued an aggregate of 6,428 Common Stock purchase warrants, which are classified as equity.

The warrants were

issued with an exercise price of $ 7.00 per share and expire on the tenth anniversary of the issuance date.

following table summarizes restricted stock award activity under the Plan:

OF RESTRICTED STOCK AWARD

Balance at December 31, 2022

Balance at December 31, 2023

the year ended December 31, 2023, the Company issued restricted stock awards (RSAs) for 431,028 shares of Common Stock to employees,

non-employees, and the Board of Directors.

The shares vest in equal monthly installments over terms of between immediately up to three

years , subject to the employees and non-employees providing continuous service through the vesting date.

During the year ended December

31, 2023, 59,051 shares vested from RSAs granted prior to January 1, 2023, and 339,263 shares vested from RSAs granted during the year

ended December 31, 2023.

the year ended December 31, 2022, the Company issued RSAs for 77,195 shares of Common Stock to employees and non-employees.

vest in equal monthly installments over terms of between immediately up to one year , subject to the employees and non-employees providing

continuous service through the vesting date.

During the year ended December 31, 2022, 29,728 shares vested from RSAs previously issued.

account for Common Stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant

Warrants are accounted for as derivative liabilities if the warrants allow for cash settlement or provide for modification

of the warrant exercise price in the event subsequent sales of Common Stock by the Company are at a lower price per share than the then-current

warrant exercise price.

We classify derivative warrant liabilities on the balance sheet at fair value, and changes in fair value during

the periods presented in the consolidated statement of operations, which is revalued at each consolidated balance sheet date subsequent

to the initial issuance of the stock warrant.

of December 31, 2023, and December 31, 2022, the Company had 4,649,952 warrants outstanding to purchase one share of the Company’s

Common Stock for each warrant at a weighted average exercise price of $ 5.03 and various expiration dates through September 2027.

year end December 31, 2023, no warrants were exercised into an equivalent number of Common Shares as compared to 1,036,486 warrants being

exercised during the year ended December 31, 2022.

September 17, 2023, the Company entered into a warrant amendment with certain holders of (1) tradeable warrants (the “Tradeable

Warrants”) who have the right to purchase 73,568 shares of Common Stock;

(2) non-tradeable warrants (the “Non-Tradeable Warrants”)

who have the right to purchase 73,568 shares of Common Stock and (3) other outstanding warrants (the “Pre-IPO Warrants”)

who have the right to purchase 1,109,475 shares of Common Stock.

The warrant amendment provides that such warrants will not be exercisable

until the date that the Company files a certificate of amendment to its certificate of incorporation with the State of Delaware which

increases the number of shares of its authorized Common Stock to allow for sufficient authorized and unissued shares of Common Stock

for the full exercise of all of the outstanding Pre-IPO Warrants, Tradeable Warrants, and Non-Tradeable Warrants of the Company and the

issuance of all of the shares of Common Stock underlying such warrants.

tax assets and valuation allowance

Company had, subject to limitation, approximately $ 18.4 million

of net operating loss carryforwards at December 31, 2022, of which approximately $ 6.0 million

will begin expiring in 2034.

The remaining balance of approximately $ 12.4 million

will carry forward indefinitely.

Company had, subject to limitation, approximately $ 30 million of net operating loss carryforwards at December 31, 2023, of which approximately

$ 0.67 million will begin expiring in 2034.

The remaining balance of approximately $ 24 million will carry forward indefinitely.

valuation allowance has been provided for the deferred tax benefits resulting from the net operating loss carryover due to a lack of

earnings history.

In addressing the realizability of deferred tax assets, management considers whether it is more likely than not

that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is

dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible.

valuation allowance increased by approximately $ 0.8 million

and $ 0.5 million

for the years ended December 31, 2022, and 2021, respectively.

Significant components of deferred tax assets are as

OF DEFERRED TAX ASSETS

In addressing the realizability of deferred tax assets, management considers whether it is more likely than not that

some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon

the generation of future taxable income during the periods in which those temporary differences are deductible.

The valuation allowance

increased by approximately $ 3.0 million and $ 0.8 million for the years ended December 31, 2023, and 2022, respectively.

Significant components

of deferred tax assets are as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets:

Net operating loss carryover

Net operating

loss carryover

Stock compensation

Capitalized R&E costs

Depreciation and amortization

Capitalized R&E

Operating lease liabilities

Total deferred tax assets

Deferred tax liability:

Right-of-use asset tax

and amortization

Total deferred tax liability

valuation allowance

1 unchanged sentence

( 5,051,045 )

Net deferred tax assets

Technologies, Inc.

to Consolidated Financial Statements

the Years Ended December 31, 2022 and 2021

reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended

property and equipment, net

reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2023

and 2022, was as follows:

OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE

Year Ended December 31,

Tax at federal statutory rate

1 unchanged sentence

Research and development credits

Change in valuation allowance

Effective income tax rate

of December 31, 2022 and 2021, the Company has unrecognized tax benefits related to tax credits of $ 190,229 and $ 49,646 ,

respectively.

None of the unrecognized tax benefits as of December 31, 2022, if recognized, would impact the effective tax rate due

to the valuation allowance, and no

interest or penalties have been recognized.

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as

Deferred balance true-up

Change in valuation

income tax rate

of December 31, 2023, and 2022, the Company has unrecognized tax benefits related to tax credits of $ 249,517 and $ 190,229 , respectively.

None of the unrecognized tax benefits as of December 31, 2023, if recognized, would impact the effective tax rate due to the valuation

allowance, and no interest or penalties have been recognized.

A reconciliation of the beginning and ending balance of unrecognized tax

benefits is as follows:

OF UNRECOGNIZED TAX BENEFITS

Beginning balance

Deductions based on tax positions related to the prior year

Additions based on tax positions related to the current year

Additions based on tax positions related

to the prior year

Additions based on tax positions related

to the current year

Ending balance

Company is not under audit with any taxing jurisdiction at this time.

The Company’s tax returns for the previous three years remain

open for audit by the respective tax jurisdictions.

RELATED PARTY TRANSACTIONS

August 2018 through July 2020, the Company has issued a total of $ 5.0 million in notes payable to various investors, of which $ 3.1 million

were sold to related parties.

See Note 8, Convertible Notes Payable, for further information.

From October 2020 through June 2021, the

Company issued a total of $ 0.9 million in notes payable, including $ 0.5 million to related parties.

From June 2021 through September

2021, the Company issued a total of approximately $ 0.9 million in additional notes payable, including $ 0.1 million to related parties.

of these notes bore interest at 8 % per annum.

The unpaid principal and accrued interest under the notes may be converted into shares

of the Company’s Common Stock at a conversion price of $ 4.20 per share.

The notes automatically converted into shares of the Company’s

Common Stock upon the completion of our IPO.

August 2022, Maria Zannes, the founder, President, Chief Executive Officer, and a director of the Company, purchased a Bridge Note in

the principal amount of $ 99,000 .

Upon the IPO Closing, the Bridge Note automatically converted into 23,672 shares of Common Stock.

connection with her Bridge Note purchase, Ms.

Zannes received a Bridge Warrant to purchase 23,571 shares of Common Stock at an exercise

price of $ 5.25 per share.

August 2022, Steven Girgenti, the Executive Chairman and a director of the Company, purchased a Bridge Note in the principal amount of

Upon the IPO closing, the Bridge Note automatically converted into 35,866 shares of Common Stock.

In connection with his Bridge

Note purchase, Mr.

Girgenti received a Bridge Warrant to purchase 35,714 shares of Common Stock at an exercise price of $ 5.25 per share.

SUBSEQUENT EVENTS

Company evaluated all events or transactions that occurred after December 31, 2022, up through the date the consolidated financial statements

During this period, the Company did not have any material subsequent events required to

be disclosed as of and for the period ended December 31, 2022.

March 8, 2024, the Company issued to certain investors, (i) in a registered direct offering, 1,600,000 shares of the Company’s

common stock and (ii) in a concurrent private placement, warrants to purchase an aggregate of 1,600,000 shares of Common Stock, with

an exercise price of $ 1.64 (collectively, the “Transaction”), which Transaction constitutes a Dilutive Issuance under the

terms of the Warrants.

3(b) of the Warrants provides that in the event of a Dilutive Issuance, the Exercise Price of the Warrants shall be reduced and only

reduced to equal the effective price per share of the Dilutive Issuance (the “Base Share Price”) and the number of Warrant

Shares issuable thereunder shall be increased such that the aggregate Exercise Price payable pursuant to the Warrant, after taking into

account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment, provided that the

Base Share Price shall not be less than $3.0625 (50% of the public offering price of the Units sold in the Company’s initial public

offering) (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions).

effect of the Transaction is such that the Exercise Price of the Warrants shall be reduced to $ 3.0625 per share.

The new number of Warrant

Shares is calculated by dividing (x) the number of Warrant Shares underlying the Warrant immediately prior to the Transaction multiplied

by the Exercise Price in effect immediately prior to the Transaction, by (y) $ 3.0625 .

The calculations will be made to the nearest cent

or the nearest 1/100th of a share.

of March 8, 2024 and prior to the Transaction, there were Tradeable Warrants to purchase up to an aggregate of 1,601,258 shares of common

stock outstanding and Non-Tradeable Warrants to purchase an aggregate of up to 2,704,554 shares of common stock outstanding.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures