bioAffinity Technologies, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______. Commission File Number: 001-41463 bioAffinity Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 46-5211056 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 3300 Nacogdoches Road , Suite 216 , San Antonio , Texas 78217 (Address of principal executive offices) (Zip Code) (210) 698-5334 (Registrant’s telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.007 per share BIAF The Nasdaq Stock Market LLC Tradeable Warrants to purchase Common Stock BIAFW The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of shares of the issuer’s Common Stock outstanding as of November 11, 2025, was 4,498,709 . Throughout this Quarterly Report on Form 10-Q (this “Quarterly Report”), the terms “bioAffinity,” “bioAffinity Technologies,” “we,” “us,” “our,” or “the Company” refer to bioAffinity Technologies, Inc., a Delaware corporation, and its wholly owned subsidiaries, OncoSelect ® Therapeutics, LLC, a Delaware limited liability company, and Precision Pathology Laboratory Services, LLC, a Texas limited liability company. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are predictive in nature, depend on or refer to future events or conditions, and are sometimes identified by words such as “may,” “could,” “plan,” “project,” “predict,” “pursue,” “believe,” “expect,” “estimate,” “anticipate,” “intend,” “target,” “seek,” “potentially,” “will likely result,” “outlook,” “budget,” “objective,” “trend,” or similar expressions of a forward-looking nature and the negative versions of such expressions. The forward-looking information contained in this report is generally located under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but may be found in other locations as well. The forward-looking statements in this report generally relate to the plans and objectives for future operations of bioAffinity Technologies, Inc. and are based on our management’s reasonable estimates of future results or trends. Although we believe these forward-looking statements are reasonable, all forward-looking statements are subject to various risks and uncertainties, and our projections and expectations may be incorrect. The factors that may affect our expectations regarding our operations include, among others, the following: ● our projected financial position and estimated cash burn rate; ● our estimates regarding expenses, future revenues, and capital requirements; ● the success, cost, and timing of our clinical trials; ● our ability to obtain funding for our operations necessary to complete further development and commercialization of our diagnostic tests or therapeutic product candidates; ● our dependence on third parties, including the conduct of our clinical trials; ● our ability to obtain the necessary regulatory approvals to market and commercialize our diagnostic tests or therapeutic product candidates; ● the potential that the results of our pre-clinical and clinical trials indicate our current diagnostic tests or any future diagnostic tests or therapeutic product candidates we may seek to develop are unsafe or ineffective; ● the results of market research conducted by us or others; ● our ability to obtain and maintain intellectual property (“IP”) protection for our current diagnostic test or future diagnostic tests and therapeutic product candidates; ● our ability to protect our IP rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our IP rights; ● the possibility that a third party may claim we or our third-party licensors have infringed, misappropriated, or otherwise violated their IP rights and that we may incur substantial costs and be required to devote substantial time defending against such claims; ● the success of competing therapies, diagnostic tests, and therapeutic products that are or will become available; ● our ability to expand our organization to accommodate potential growth and to retain and attract key personnel; ● our potential to incur substantial costs resulting from product liability lawsuits against us and the potential for such lawsuits to cause us to limit the commercialization of our diagnostic tests and therapeutic product candidates; ● market acceptance of our diagnostic test and diagnostic tests in development and therapeutic product candidates, the size and growth of the potential markets for our current diagnostic test, diagnostic tests in development, and therapeutic product candidates, and any future diagnostic tests and therapeutic product candidates we may seek to develop, and our ability to serve those markets; ● the successful development of our commercialization capabilities, including sales and marketing capabilities; ● compliance with government regulations, including environmental, health, and safety regulations, and liabilities thereunder; ● the impact of a health epidemic on our business, our clinical trials, our research programs, healthcare systems, or the global economy as a whole; ● general instability of economic and political conditions in the United States, including inflationary pressures, increased interest rates, economic slowdown or recession, and escalating geopolitical tensions; 2 ● anticipated uses of net proceeds from our financings; ● the increased expenses associated with being a public company; and ● other factors discussed elsewhere in this Quarterly Report. Many of the foregoing risks and uncertainties, as well as risks and uncertainties that are currently unknown to us, are, and may be, exacerbated by factors such as the ongoing conflict between Ukraine and Russia, the war in the Middle East, escalating tensions between China and Taiwan, increasing economic uncertainty and inflationary pressures, and any consequent worsening of the global business and economic environment. New factors emerge from time to time, and it is not possible for us to predict all such factors. Should one or more of the risks or uncertainties described in this Quarterly Report or any other filing with the Securities and Exchange Commission (the “SEC”) occur or should the assumptions underlying the forward-looking statements we make herein and therein prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. You should read this Quarterly Report and the documents that we reference within it with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect. Website and Social Media Disclosure We use our websites (www.bioaffinitytech.com, ir.bioaffinitytech.com, www.cypathlung.com and www.precisionpath.us) to share Company information. Information contained on or that can be accessed through our websites is not, however, incorporated by reference in this Quarterly Report. Investors should not consider any such information to be part of this Quarterly Report. 3 bioAffinity Technologies, Inc. FORM 10-Q TABLE OF CONTENTS PART I FINANCIAL INFORMATION ITEM 1 - Condensed Consolidated Financial Statements (unaudited) 5 Condensed Consolidated Balance Sheets at September 30, 2025 (unaudited) and December 31, 2024 5 Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2025 and 2024 6 Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months ended September 30, 2025 and 2024 7 Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2025 and 2024 8 Notes to Unaudited Condensed Consolidated Financial Statements 9 ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk 27 ITEM 4 - Controls and Procedures 27 PART II OTHER INFORMATION ITEM 1 - Legal Proceedings 28 ITEM 1A - Risk Factors 28 ITEM 2 - Unregistered Sales of Equity Securities and Use of Proceeds 31 ITEM 3 - Defaults Upon Senior Securities 31 ITEM 4 - Mine Safety Disclosure 31 ITEM 5 - Other Information 31 ITEM 6 - Exhibits 32 Signatures 33 4 PART I FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. bioAffinity Technologies, Inc. Condensed Consolidated Balance Sheets September 30, 2025 December 31, 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 7,669,195 $ 1,105,291 Accounts and other receivables, net 448,990 1,139,204 Inventory 35,234 27,608 Prepaid expenses and other current assets 460,187 422,995 Total current assets 8,613,606 2,695,098 Non-current assets: Property and equipment, net 303,122 375,385 Operating lease right-of-use asset, net 367,398 463,011 Finance lease right-of-use asset, net 113,553 780,872 Goodwill 1,404,486 1,404,486 Intangible assets, net 731,389 775,139 Other assets 12,815 19,676 Total assets $ 11,546,369 $ 6,513,667 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 940,761 $ 987,311 Accrued expenses 984,547 1,398,722 Unearned revenue 37,915 24,404 Operating lease liability, current portion 136,197 127,498 Finance lease liability, current portion 123,757 395,301 Notes payable, current portion 136,396 171,669 Total current liabilities 2,359,573 3,104,905 Non-current liabilities: Operating lease liability, net of current portion 238,942 342,098 Finance lease liability, net of current portion 1,998 444,448 Notes payable, net of current portion 43,658 20,180 Total liabilities 2,644,171 3,911,631 Commitments and contingencies (Note 11) - - Stockholders’ equity: Preferred stock, par value $ 0.001 per share; 20,000,000 shares authorized; 700 and 0 shares issued and outstanding at September 30, 2025, and December 31, 2024, respectively 1 — Common Stock, par value $ 0.007 per share; 350,000,000 shares authorized; 3,466,260 and 507,520 issued and outstanding at September 30, 2025, and December 31, 2024, respectively (1) 24,264 3,553 Additional paid-in capital (1) 74,294,531 56,242,793 Accumulated deficit ( 65,416,598 ) ( 53,644,310 ) Total stockholders’ equity 8,902,198 2,602,036 Total liabilities and stockholders’ equity $ 11,546,369 $ 6,513,667 (1) The values of Common Stock and paid-in capital, as well as the number of shares issued and outstanding, have been retroactively adjusted in order to give effect to the Company’s 1-for-30 reverse stock split. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 bioAffinity Technologies, Inc. Unaudited Condensed Consolidated Statements of Operations 2025 2024 2025 2024 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenue $ 1,446,066 $ 2,350,386 $ 4,569,146 $ 7,154,429 Operating expenses: Direct costs and expenses 942,211 1,440,158 3,326,673 4,421,309 Research and development 330,589 274,497 1,009,347 1,070,569 Clinical development 143,311 93,705 410,943 194,127 Selling, general and administrative 2,209,441 2,364,592 6,876,551 7,023,311 Depreciation and amortization 113,360 151,298 381,177 452,005 Total operating expenses 3,738,912 4,324,250 12,004,691 13,161,321 Loss from operations ( 2,292,846 ) ( 1,973,864 ) ( 7,435,545 ) ( 6,006,892 ) Other income (expense): Interest income 1,088 2,228 3,655 13,541 Interest expense ( 5,358 ) ( 21,631 ) ( 31,303 ) ( 67,430 ) Other income 513 9,683 38,568 9,683 Other expense ( 3,839 ) ( 14,697 ) ( 496,524 ) ( 10,186 ) Change in fair value of warrants issued ( 2,747,460 ) — ( 3,810,278 ) — Total other income (expense), net ( 2,755,056 ) ( 24,417 ) ( 4,295,882 ) ( 54,392 ) Net loss before provision for income tax expense ( 5,047,902 ) ( 1,998,281 ) ( 11,731,427 ) ( 6,061,284 ) Provision for income tax expense 3,182 2,559 40,861 11,650 Net loss $ ( 5,051,084 ) $ ( 2,000,840 ) $ ( 11,772,288 ) $ ( 6,072,934 ) Net loss per common share, basic and diluted (2) $ ( 4.74 ) $ ( 4.84 ) $ ( 7.55 ) $ ( 16.22 ) Weighted average common shares outstanding (2) 1,066,350 412,936 804,604 374,445 (2) The values of Common Stock and paid-in capital, as well as the number of shares issued and outstanding, have been retroactively adjusted in order to give effect to the Company’s 1-for-30 reverse stock split. The accompanying notes are an integral part of these unaudited consolidated financial statements 6 bioAffinity Technologies, Inc. Unaudited Consolidated Statements of Changes in Stockholders’ Equity Shares Amount Shares Amount (3) Capital (3) Deficit Equity For the Nine Months Ended September 30, 2025 Preferred Stock Common Stock (3) Additional Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Capital (3) Deficit Equity Balance at December 31, 2024 — $ — 507,520 $ 3,553 $ 56,242,793 $ ( 53,644,310 ) $ 2,602,036 Stock-based compensation expense — — 12,416 87 605,268 — 605,355 Sale of Common Stock — — 2,068,993 14,483 6,315,649 — 6,330,132 Exercise of stock warrants — — 835,303 5,847 7,137,908 — 7,143,755 Issuance of Preferred Stock 990 1 — — 989,999 — 990,000 Conversion of Preferred Stock ( 290 ) — 42,028 294 ( 294 ) — — Reclass of warrant liability — — — — 4,421,667 — 4,421,667 Offering costs — — — — ( 1,418,459 ) — ( 1,418,459 ) Net loss — — — — — ( 11,772,288 ) ( 11,772,288 ) Balance at September 30, 2025 (unaudited) 700 $ 1 3,466,260 $ 24,264 $ 74,294,531 $ ( 65,416,598 ) $ 8,902,198 For the Three Months Ended September 30, 2025 Preferred Stock Common Stock (3) Additional Paid-in Accumulated Stockholders’ Equity Shares Amount Shares Amount Capital (3) Deficit (Deficit) Balance at June 30, 2025 (unaudited) — $ — 939,138 $ 6,573 $ 58,222,833 $ ( 60,365,514 ) $ ( 2,136,108 ) Stock-based compensation expense — — 2,625 19 67,113 — 67,132 Sale of Common Stock — — 1,730,789 12,116 6,075,688 — 6,087,804 Exercise of stock warrants — — 751,680 5,262 5,579,917 — 5,585,179 Issuance of Preferred Stock 990 1 — — 989,999 — 990,000 Conversion of Preferred Stock ( 290 ) — 42,028 294 ( 294 ) — — Reclass of warrant liability — — — — 4,421,667 — 4,421,667 Offering costs — — — — ( 1,062,392 ) — ( 1,062,392 ) Net loss — — — — — ( 5,051,084 ) ( 5,051,084 ) Balance at September 30, 2025 (unaudited) 700 $ 1 3,466,260 $ 24,264 $ 74,294,531 $ ( 65,416,598 ) $ 8,902,198 For the Nine Months Ended September 30, 2024 Preferred Stock Common Stock (3) Additional Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Capital (3) Deficit Equity Balance at December 31, 2023 — $ — 313,114 $ 2,192 $ 49,457,542 $ ( 44,604,479 ) $ 4,855,255 Stock-based compensation expense — — 12,639 89 755,505 — 755,594 Exercise of stock options — — 6,931 15 74,884 — 74,899 Exercise of stock warrants — — 35,558 249 1,343,128 — 1,343,377 Sale of Common Stock — — 65,333 457 2,949,544 — 2,950,001 Offering costs — — — — ( 785,167 ) — ( 785,167 ) Net loss — — — — — ( 6,072,934 ) ( 6,072,934 ) Balance at September 30, 2024 (unaudited) — $ — 433,575 $ 3,002 $ 53,795,436 $ ( 50,677,413 ) $ 3,121,025 For the Three Months Ended September 30, 2024 Preferred Stock Common Stock (3) Additional Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Capital (3) Deficit Equity Balance at June 30, 2024 (unaudited) — $ — 382,842 $ 2,647 $ 52,107,040 $ ( 48,676,573 ) $ 3,433,114 Balance — $ — 382,842 $ 2,647 $ 52,107,040 $ ( 48,676,573 ) $ 3,433,114 Stock-based compensation expense — — 3,176 22 185,665 — 185,687 Exercise of stock options — — — — — — — Exercise of stock warrants — — 35,557 249 1,342,981 — 1,343,230 Sale of Common Stock — — 12,000 84 449,917 — 450,001 Offering costs — — — — ( 290,167 ) — ( 290,167 ) Net loss — — — — — ( 2,000,840 ) ( 2,000,840 ) Balance at September 30, 2024 (unaudited) — $ — 433,575 $ 3,002 $ 53,795,436 $ ( 50,677,413 ) $ 3,121,025 Balance — $ — 433,575 $ 3,002 $ 53,795,436 $ ( 50,677,413 ) $ 3,121,025 (3) The values of Common Stock and paid-in capital, as well as the number of shares issued and outstanding, have been retroactively adjusted in order to give effect to the Company’s 1-for-30 reverse stock split. The accompanying notes are an integral part of these condensed consolidated financial statements. 7 bioAffinity Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (unaudited) 2025 2024 Nine Months Ended September 30, 2025 2024 Cash flows from operating activities Net loss $ ( 11,772,288 ) $ ( 6,072,934 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 381,177 452,005 Stock-based compensation expense 605,355 755,594 Fair value adjustment on warrants 3,810,278 — Changes in operating assets and liabilities: Accounts and other receivables 690,214 ( 515,494 ) Inventory ( 7,626 ) ( 6,879 ) Prepaid expenses and other assets ( 30,331 ) ( 122,626 ) Accounts payable ( 46,550 ) 178,148 Accrued expenses ( 414,175 ) ( 245,559 ) Unearned revenue 13,511 ( 8,654 ) Operating lease right-of-use asset 1,156 ( 1,235 ) Net cash used in operating activities ( 6,769,279 ) ( 5,587,634 ) Cash flows from investing activities Purchase of property and equipment ( 60,567 ) ( 79,082 ) Net cash used in investing activities ( 60,567 ) ( 79,082 ) Cash flows from financing activities Proceeds from issuance of Common Stock from direct offering 9,271,534 2,950,000 Proceeds from exercise of options — 74,899 Proceeds from exercise of warrants 4,813,742 1,343,377 Proceeds from issuance of Convertible Preferred Stock 990,000 — Payment of offering costs for financing activities ( 1,418,459 ) ( 785,167 ) Payment on loans payable, net ( 11,795 ) — Proceeds from loans payable — 288,760 Principal repayments on finance leases ( 251,272 ) ( 270,143 ) Net cash provided by financing activities 13,393,750 3,601,726 Net increase (decrease) in cash and cash equivalents 6,563,904 ( 2,064,990 ) Cash and cash equivalents at beginning of period 1,105,291 2,821,570 Cash and cash equivalents at end of period $ 7,669,195 $ 756,580 Supplemental disclosures of cash flow information: Interest expense paid in cash $ 3,655 $ 13,541 Income taxes paid in cash 40,861 11,650 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 bioAffinity Technologies, Inc. Notes to Condensed Consolidated Financial Statements (unaudited) Note 1. NATURE OF OPERATIONS, ORGANIZATION, AND BASIS OF PRESENTATION Description of Business bioAffinity Technologies, Inc., a Delaware corporation (the “Company,” or “bioAffinity Technologies”), addresses the need for noninvasive diagnosis of lung cancer at early stage and other diseases of the lung. bioAffinity Technologies’ proprietary platform uses flow cytometry and automated data analysis built by machine learning, a form of artificial intelligence (“AI”), to preferentially target cancer cell populations and other cell populations indicative of a diseased state. 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. CyPath ® Lung is offered for sale to physicians by the Company’s subsidiary, Precision Pathology Laboratory Services, LLC (“PPLS”). The Company is developing its flow cytometry platform to address the need to identify patients who can benefit from new and emerging therapies for asthma and chronic obstructive pulmonary disease (COPD) with noninvasive precision diagnostic tests. Research also is advancing the Company’s therapeutic discoveries that could in the future result in broad-spectrum cancer treatments, beginning with treatment delivered topically for squamous cell skin cancer. Commercial operations and product development are conducted in laboratories at PPLS and laboratory space leased at The University of Texas at San Antonio. Organization The Company was formed on March 26, 2014, as a Delaware corporation with its corporate offices located in San Antonio, Texas. On June 15, 2016, the Company formed a wholly owned subsidiary, OncoSelect ® Therapeutics, LLC, as a Delaware limited liability company. 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. (“Village Oaks”), a Texas professional association d/b/a Precision Pathology Services, including the clinical pathology laboratory it owned. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC for interim financial reporting. The condensed consolidated financial statements are unaudited and in management’s opinion include all adjustments, including normal recurring adjustments and accruals, necessary for a fair presentation of the results for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2024, was derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025, or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025 (the “2024 Form 10-K”). Certain prior period balances have been reclassified to conform to current period presentation. Any reclassifications had an immaterial effect on the Company’s consolidated financial statements and had no effect on prior periods net income or stockholders’ equity. All share and per-share amounts in the accompanying footnotes have been retroactively adjusted to reflect the Company’s 1-for-30 reverse stock split. Liquidity and Capital Resources In 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 condensed consolidated financial statements are issued. The Company has incurred significant losses and negative cash flows from operations since inception and expects to continue to incur losses and negative cash flows for the foreseeable future. As a result, the Company had an accumulated deficit of approximately $ 65.4 million at September 30, 2025. The Company’s cash and cash equivalents at September 30, 2025, were approximately $ 7.7 million. Based on the Company’s current expected level of operating expenditures and the cash and cash equivalents on hand at September 30, 2025, management concludes that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements. During the third quarter of 2025, the Company completed various transactions to raise an additional $ 13.4 million in gross proceeds. Without funding from the proceeds of a capital raise or strategic relationship or grant, management anticipates that the Company’s current cash resources are sufficient to continue operations through May 2026. The Company will 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 revenue from operations does not significantly increase. If such funding is not available or not available on terms acceptable to the Company, the Company’s current development plan may be curtailed. Furthermore, an alternative source of funding to the sale of additional equity or debt securities is the exercise of outstanding warrants for which there can be no guarantee. No adjustments have been made to the presented condensed consolidated financial statements as a result of this uncertainty. 9 Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP in the U.S. requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these significant judgments and estimates on historical experience and other assumptions it believes to be reasonable based upon information presently available. Actual results could differ from those estimates under different assumptions, judgments, or conditions. Principles of Consolidation The 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. In 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. Cash and Cash Equivalents For the purpose of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates market value, because of the short maturity of these instruments. Concentration of Risk 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 flow. Advertising Expense The Company expenses all advertising costs as incurred. Advertising expense was $ 273,087 and $ 232,396 for the nine months ended September 30, 2025 and 2024, respectively, and $ 101,265 and $ 101,271 for the three months ended September 30, 2025 and 2024, respectively. Loss Per Share Basic 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 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, unvested restricted stock, and warrants based on the average stock price for each period using the treasury stock method. 10 The following potentially dilutive securities have been excluded from the computations of weighted-average shares of Common Stock outstanding as of September 30, 2025 and 2024, as they would be anti-dilutive: SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES 2025 2024 As of September 30, 2025 2024 Shares underlying options outstanding 9,055 11,243 Shares underlying convertible preferred stock 101,448 — Shares underlying warrants outstanding 1,348,292 283,575 Shares underlying unvested restricted stock 6,805 13,843 Anti-dilutive securities 1,465,600 308,661 Revenue Recognition To 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. Post-acquisition of PPLS, additional revenue streams have been consolidated starting September 19, 2023. PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. The Company recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered. The Company follows a standard process, which considers historical denial and collection experience and other factors (including the period of time that the receivables have been outstanding), to estimate contractual allowances and implicit price concessions, recording adjustments in the current period as changes in estimates. The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation. SCHEDULE OF REVENUE RECOGNITION 2025 2024 Nine Months Ended September 30, Three Months Ended September 30, 2025 2024 2025 2024 Patient service fees 1 $ 3,685,397 $ 6,259,806 $ 1,172,948 $ 2,049,851 Histology service fees 827,944 811,914 255,586 281,861 Medical director fees 51,171 50,136 17,274 16,943 Department of Defense observational studies — 8,654 — 1,731 Other revenues 4,634 23,919 258 — Total net revenue $ 4,569,146 $ 7,154,429 $ 1,446,066 $ 2,350,386 1 Patient services fees include direct billing for CyPath ® Lung diagnostic test of approximately $ 619,000 and $ 332,000 for the nine months ended September 30, 2025 and 2024, respectively, and $ 296,000 and $ 133,000 for the three months ended September 30, 2025 and 2024, respectively. Property and Equipment In 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. The Company did not record any impairment for the three and nine months ended September 30, 2025, or for the fiscal year ended December 31, 2024. Property 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. Useful lives of each asset class are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE Asset Category Useful Life Computer equipment 3 - 5 years Computer software 3 years Equipment 3 - 5 years Furniture and fixtures 5 - 7 years Vehicles 5 years Leasehold improvements Lesser of lease term or useful life 11 Intangible Assets The Company’s acquisition of PPLS on September 18, 2023, identified goodwill and intangible assets. Goodwill represents the purchase price in excess of fair values assigned to the underlying identifiable net assets of the acquired business. The Company tests goodwill for impairment annually and, therefore, does not record amortization. The intangible assets and their respective useful lives are as follows: trade names and trademarks ( 18 years) and customer relationships ( 14 years). Intangible assets, net of accumulated amortization, are summarized as follows as of September 30, 2025, and December 31, 2024: SCHEDULE OF INTANGIBLE ASSETS September 30, December 31, 2025 2024 Cost Goodwill $ 1,404,486 $ 1,404,486 Trade names and trademarks 150,000 150,000 Customer relationships 700,000 700,000 Cost 2,254,486 2,254,486 Accumulated amortization Trade names and trademarks ( 16,944 ) ( 10,694 ) Customer relationships ( 101,667 ) ( 64,167 ) Accumulated amortization ( 118,611 ) ( 74,861 ) Intangible assets, net $ 2,135,875 $ 2,179,625 The Company incurred amortization of intangible assets of $ 43,750 for each of the nine months ended September 30, 2025 and 2024, and $ 14,583 for each of the three months ended September 30, 2025 and 2024. Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this pronouncement on its related disclosures. Segment Information The Company is organized into 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 and therapeutic discoveries. 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 Technologies. SCHEDULE OF SEGMENT INFORMATION 2025 2024 2025 2024 Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net revenue: Diagnostic R&D $ — $ 1,731 $ — $ 8,654 Laboratory services 1,446,066 2,348,655 4,569,146 7,145,775 Total net revenue 1,446,066 2,350,386 4,569,146 7,154,429 Operating expenses: Diagnostic R&D ( 473,900 ) ( 368,202 ) ( 1,420,290 ) ( 1,264,696 ) Laboratory services ( 1,509,795 ) ( 2,150,825 ) ( 5,423,922 ) ( 7,423,109 ) General corporate activities ( 1,755,217 ) ( 1,805,223 ) ( 5,160,479 ) ( 4,473,516 ) Total operating expenses ( 3,738,912 ) ( 4,324,250 ) ( 12,004,691 ) ( 13,161,321 ) Total operating loss ( 2,292,846 ) ( 1,973,864 ) ( 7,435,545 ) ( 6,006,892 ) Non-operating (expense), net ( 2,755,056 ) ( 24,417 ) ( 4,295,882 ) ( 54,392 ) Net loss before income tax expense ( 5,047,902 ) ( 1,998,281 ) ( 11,731,427 ) ( 6,061,284 ) Income tax expense ( 3,182 ) ( 2,559 ) ( 40,861 ) ( 11,650 ) Net loss $ ( 5,051,084 ) $ ( 2,000,840 ) $ ( 11,772,288 ) $ ( 6,072,934 ) 12 Research and Development Research and development costs are charged to expense as incurred. The Company’s research and development expenses consist primarily of expenditures for laboratory operations, preclinical studies, compensation, and consulting costs. Accrued Research and Development Costs The Company records accrued liabilities for estimated costs of research and development activities conducted by service providers, which include preclinical studies. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in accrued expenses in the accompanying condensed consolidated balance sheets and within research and development expense in the accompanying condensed consolidated statements of operations. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with service providers. The Company makes significant judgments and estimates in determining the accrued expenses balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception. Regulatory Matters Regulations 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 the Federal Food, Drug, and Cosmetic Act (“FDCA”), which is administered by the Food and Drug Administration (“FDA”) and the Centers for Medicare & Medicaid Services (“CMS”). 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 (“LDT”) sold by our wholly owned subsidiary PPLS, a clinical pathology laboratory accredited by the College of American Pathologists (“CAP”) and certified under the Clinical Laboratory Improvement Amendments (“CLIA”). Note 3. ACCOUNTS AND OTHER RECEIVABLES, NET The following is a summary of accounts receivables and other receivables: SCHEDULE OF ACCOUNTS AND OTHER RECEIVABLES September 30, 2025 December 31, 2024 Patient service fees $ 235,403 $ 915,488 Histology service fees 167,000 190,648 Medical director fees 19,444 5,194 Other receivables 27,143 27,874 Total accounts and other receivables, net $ 448,990 $ 1,139,204 Note 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets are summarized below: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, 2025 December 31, 2024 Prepaid insurance $ 224,211 $ 248,364 Legal and professional 45,670 27,448 Other 190,306 147,183 Total prepaid expenses and other current assets $ 460,187 $ 422,995 Note 5. PROPERTY AND EQUIPMENT, NET Property and equipment are summarized below: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2025 December 31, 2024 Lab equipment $ 679,995 $ 662,747 Computers and software 81,433 81,433 Leasehold improvements 32,781 19,353 Vehicles 175,630 148,103 Property and equipment, gross 969,839 911,636 Accumulated depreciation ( 666,717 ) ( 536,251 ) Total property and equipment, net $ 303,122 $ 375,385 Depreciation expense was $ 132,830 and $ 119,526 for the nine months ended September 30, 2025 and 2024, respectively, and $ 44,599 and $ 40,472 for the three months ended September 30, 2025 and 2024, respectively. 13 Note 6. ACCRUED EXPENSES Accrued expenses are summarized below: SCHEDULE OF ACCRUED EXPENSES September 30, 2025 December 31, 2024 Compensation $ 717,762 $ 1,079,839 Legal and professional 141,714 98,477 Clinical 96,413 160,371 Other 28,658 60,035 Total accrued expenses $ 984,547 $ 1,398,722 Note 7. UNEARNED REVENUE The Company engaged in an observational study of CyPath ® Lung with the U.S. Department of Defense (“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 40 units as of September 30, 2025. The performance obligation is deemed complete after samples have been collected, processed, and analyzed and results communicated to patients. The unearned revenue balance amounted to $ 24,404 as of September 30, 2025, and December 31, 2024. During third quarter 2025, the Company engaged with Veteran Administration (“VA”) medical centers to purchase CyPath ® Lung tests. A total of 20 tests were ordered and shipped. However, in compliance with FASB ASC 606, the performance obligation was complete for only 4 tests as of September 30, 2025. The performance obligation is deemed complete after samples have been collected, processed, and analyzed and results communicated to patients. The unearned revenue balance amounted to $ 13,511 as of September 30, 2025. Note 8. FAIR VALUE MEASUREMENTS The 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. The three levels of the hierarchy and the related inputs are as follows: Level Inputs 1 Unadjusted quoted prices in active markets for identical assets and liabilities; Unadjusted quoted prices in active markets for similar assets and liabilities. 2 Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability. 3 Unobservable inputs for the asset or liability. The 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 note payable, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. Warrants The Company issued liability classified warrants in connection with the issuance of the May 2025 warrants. The warrants were liability classified as a result of certain terms in the May 2025 warrant agreement, and the terms were amended during September 2025 to trigger an equity classification on the date of the reverse stock split. The Company uses a Black-Scholes model to estimate the fair value of the warrants. Changes in the fair value of the warrants are recognized in “Change in fair value of warrants issued” for each reporting period in the condensed consolidated statements of operations. The Company notes there were no liabilities as of September 30, 2025 and December 31, 2024. The Company remeasured the warrant liability three times prior to converting the liability classification to equity classification. The Company initially recorded a warrant liability of $ 2.9 million as a result of the May 2025 public offering. The Company revalued and recognized an aggregate of $ 3.8 million in change in fair value of warrants issued before adjusting the warrant liability to equity classified warrants. Note 9. LEASES The Company has one operating lease for its real estate and office space for the CAP/CLIA laboratory, as well as multiple finance leases for lab equipment in Texas that were acquired through the September 18, 2023, acquisition. On April 1, 2025, the Company terminated one of the finance leases related to lab equipment due to the Company’s targeted strategic actions announced in March 2025. Additionally, the Company entered into another operating lease on September 1, 2024, with regard to office space. The Company has operating leases consisting of office space with remaining lease terms ranging from 1.8 to 4.9 years as of September 30, 2025. The Company has finance leases consisting of lab equipment with remaining lease terms ranging from approximately 0.6 to 1.3 years as of September 30, 2024, for which the Company has determined that it will use the equipment for a major part of its remaining economic life. The lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach as of the date of inception of the leases 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 6.41 % to 8.07 % for the lease term lengths. Leases 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 agreements. 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. The 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. 14 The components of lease expense, which are included in selling, general and administrative expense and depreciation and amortization for the three and nine months ended September 30, 2025 and 2024, are as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE 2025 2024 2025 2024 Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Amortization of right-of-use asset - finance lease $ 54,177 $ 96,243 $ 204,597 $ 288,729 Interest on lease liabilities - finance lease 3,227 21,533 23,718 67,318 Operating lease cost 39,764 33,198 119,293 93,029 Total lease cost $ 97,168 $ 150,974 $ 347,608 $ 449,076 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ ( 58,031 ) $ ( 91,038 ) $ ( 251,272 ) $ ( 270,143 ) Operating cash flows from operating leases ( 38,220 ) ( 203 ) ( 94,458 ) ( 1,235 ) SCHEDULE OF BALANCE SHEET INFORMATION RELATING TO LEASES Operating leases: September 30, 2025 December 31, 2024 Operating lease right-of-use, assets $ 367,398 $ 463,011 Operating lease liability, current $ 136,197 $ 127,498 Operating lease liability, non-current 238,942 342,098 Total operating lease liabilities $ 375,139 $ 469,596 Finance leases: September 30, 2025 December 31, 2024 Finance lease right-of-use asset, gross $ 565,030 $ 1,294,168 Accumulated amortization ( 451,477 ) ( 513,296 ) Finance lease right-of-use asset, net $ 113,553 $ 780,872 Finance lease liability, current portion $ 123,757 $ 395,301 Finance lease liability, long-term 1,998 444,448 Total finance lease liabilities $ 125,755 $ 839,749 Weighted-average remaining lease term: September 30, 2025 December 31, 2024 Operating leases (in years) 3.22 4.21 Finance leases (in years) 0.64 2.39 Weighted-average discount rate: September 30, 2025 December 31, 2024 Operating leases 7.32 % 7.41 % Finance leases 7.85 % 8.03 % Future minimum lease payments under non-cancellable leases as of September 30, 2025, are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT UNDER NON-CANCELLABLE Operating Leases Finance Leases Remaining for 2025 $ 39,696 $ 61,384 2026 159,282 67,425 2027 110,063 — 2028 40,616 — 2029 42,252 — 2030 and thereafter 28,919 — Total undiscounted cash flows 420,828 128,809 Less discounting ( 45,689 ) ( 3,054 ) Present value of lease liabilities $ 375,139 $ 125,755 15 Note 10. NOTES PAYABLE Vehicles Notes Payable On January 10, 2025, the Company entered into a finance agreement to purchase a 2024 Toyota Corolla for $ 33,517 with a maturity date of January 18, 2031 . The loan bears fixed interest at a rate of 11.65 % per annum, with monthly payments of $ 651 , which is comprised of principal and interest. This loan is collateralized by the underlying vehicle. The balance of this loan as of September 30, 2025, was $ 30,840 . The current portion of the balance of this loan as of September 30, 2025 was $ 4,457 . On March 18, 2024, the Company entered into a finance agreement to purchase a 2024 Toyota Corolla for $ 33,620 with a maturity date of February 18, 2030 . The loan bears fixed interest at a rate of 5.99 % per annum, with monthly payments of $ 467 , which is comprised of principal and interest. This loan is collateralized by the underlying vehicle. The balance of this loan as of September 30, 2025, and December 31, 2024, was $ 21,700 and $ 24,849 , respectively. The current portion of the balance of this loan as of September 30, 2025, and December 31, 2024, was $ 4,425 and $ 5,603 , respectively. Directors and Officers Insurance Policy – 2025 In September 2025, the Company obtained short-term financing of approximately $ 127,500 with 10 monthly payments of approximately $ 13,000 and interest at a 11.64 % fixed annual rate for director and officer insurance policies. The current portion of the balance of the Company’s Directors and Insurance short-term financing as of September 30, 2025, was $ 128,000 and $ 167,000 as of December 31, 2024, for the 2024 Directors and Officers Insurance Policy. Note 11. COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is involved in various disputes and litigation matters that arise in the ordinary course of business. To date, the Company has no material pending legal proceedings. Note 12. COMMON STOCK Common Stock The Company has authorized a total of 350,000,000 shares of Common Stock, $ 0.007 par value per share. On July 22, 2025, the Company received stockholder approval to increase the number of authorized shares of Common Stock from 100,000,000 shares to 350,000,000 shares, and on August 13, 2025, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the increase. The Company has issued 3,473,065 shares of Common Stock, of which 6,805 are unvested restricted stock awards as of September 30, 2025, and 519,155 shares of Common Stock, of which 11,635 are unvested restricted stock awards as of December 31, 2024 adjusted for the 30-1 reverse stock split. On August 13, 2025, the Company entered into a securities purchase agreement with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, (i) 990 shares of the Company’s newly designated Series B Convertible Preferred Stock, with a par value $ 0.001 per share and stated value of $ 1,000 per share initially convertible into 143,476 shares of the Company’s Common Stock, par value $ 0.007 per share at an initial conversion price of $ 6.90 per share and (ii) warrants to purchase up to 223,824 shares of the Company’s Common Stock at an exercise price of $ 10.56 per share of Common Stock. The investors have converted 290 of the 990 Series B Convertible Preferred Stock in exchange for 42,028 shares of Common Stock as of September 30, 2025. On September 29, 2025, the Company consummated a best efforts public offering of an aggregate of (i) 1,047,694 shares of Common Stock and (ii) pre-funded warrants to purchase up to 874,067 shares of Common Stock in lieu of shares of Common Stock. Each share was sold at a public offering price of $ 2.50 . Each pre-funded warrant was sold at a public offering price of $ 2.493 . The total gross proceeds for the transaction were approximately $ 4.8 million. On May 22, 2025, the Company entered into an at-the-market issuance sales agreement (the “ATM Agreement”) with WallachBeth Capital LLC (“WallachBeth”), as sales agent providing for the sale of our common stock from time to time in an “at the market offering” program. The aggregate market value of the shares of Common Stock eligible for sale is currently $ 5,801,000 . The ATM Agreement provides that WallachBeth will receive 3.0 % of the gross sales price sold under the ATM Agreement. From May 22, 2025, through September 30, 2025, the Company sold 114,672 shares of Common Stock through the ATM Agreement which accumulated approximately $ 1.2 million in gross proceeds. 16 Note 13. STOCK-BASED COMPENSATION Under the Company’s 2104 Equity Incentive Plan (the “2014 Plan”), the Company is authorized to grant options or restricted stock for up to 66,667 shares of Common Stock. On June 6, 2023, the Company received stockholder approval to increase the number of authorized shares from 38,095 to 66,667 , adjusted for the 30-1 reverse split. 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. Options and restricted stock awards granted under the 2014 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 2014 Plan expired at the end of its 10 -year term in March 2024. A new 2024 Incentive Compensation Plan (the “2024 Plan”) was approved at the Annual Meeting of Shareholders on June 4, 2024. The Company has recorded stock-based compensation expense related to the issuance of restricted stock awards in the following line items in the accompanying condensed consolidated statements of operations: SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION AWARDS 2025 2024 2025 2024 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and development $ — $ 30,605 $ 12,916 $ 87,832 Selling, General and administrative 67,132 155,082 592,439 667,762 Total stock-based compensation expense $ 67,132 $ 185,687 $ 605,355 $ 755,594 The following table summarizes stock option activity under the 2014 Plan and 2024 Plan: SUMMARY OF OPTION ACTIVITY Number of options Weighted-average exercise price Weighted-average remaining contractual term (in years) Aggregate intrinsic value Outstanding at December 31, 2024 9,649 $ 207.84 4.45 — Granted — — — — Exercised — — — — Forfeited ( 594 ) 147.28 — — Outstanding at September 30, 2025 9,055 $ 211.82 3.90 — Vested and exercisable at September 30, 2025 9,055 $ 211.82 3.90 — As of September 30, 2025, there was no unrecognized compensation cost related to non-vested stock options. The following table summarizes restricted stock award activity under the 2014 Plan and 2024 Plan: SUMMARY OF RESTRICTED STOCK AWARD Number of As of September 30, 2025 restricted stock awards (RSA) Weighted- average grant price FMV on grant date Vested number of RSA Unvested number of RSA Balance at December 31, 2024 44,107 $ 57.08 $ 2,517,843 39,415 4,692 Granted 8,598 24.89 214,003 5,628 2,113 Forfeited ( 856 ) 24.30 ( 20,800 ) — — Balance at September 30, 2025 51,849 $ 52.28 $ 2,711,046 45,043 6,805 During the nine months ended September 30, 2025, the Company issued restricted stock awards (“RSAs”) for 8,598 shares of Common Stock to employees, non-employees, and the board of directors. The shares vest in equal monthly installments over terms of immediately and up to three years , subject to the employees and non-employees providing continuous service through the vesting date. During the nine months ended September 30, 2025, 5,628 shares vested from RSAs granted in 2025, and 6,788 shares vested from RSA’s granted prior to 2025. 17 Note 14. WARRANTS The Company’s outstanding Common Stock warrants are equity classified. As of September 30, 2025, and December 31, 2024, the Company had 1,348,292 and 409,937 warrants outstanding to purchase one share of the Company’s Common Stock for each warrant at a weighted average price of $ 28.44 . These warrants expire at various dates through August 2030. During the nine months ended September 30, 2025, a total number of 835,303 warrants were exercised into an equivalent number of shares of Common Stock as compared to 35,558 being exercised during the nine months ended September 30, 2024. During the third quarter of 2025, a total of 63,907 warrants were forfeited through a cashless exercise. The proceeds of the exercised warrants for the nine months ended September 30, 2025, were approximately $ 4.8 million, compared to proceeds of $ 1.3 million during the nine months ended September 30, 2024. On February 25, 2025, the Company entered into a warrant inducement agreement (the “February Inducement Agreement”) with certain holders (the “Holders”) of the Company’s warrants to purchase shares of the Company’s Common Stock, issued in a private placement offering that closed on October 21, 2024 (the “October Warrants”), and a private placement offering that closed on August 5, 2024 (the “August Warrants” and, together with the October Warrants, collectively, the “Existing Warrants”). In consideration of the Holders’ immediate exercise of the Existing Warrants in accordance with the February Inducement Agreement, the Company issued unregistered Common Stock purchase warrants (the “New Warrants”) to purchase an aggregate of up to 97,538 shares of Common Stock (the “New Warrant Shares”) to the Holders of the Existing Warrants, with an exercise price of $ 25.50 . On May 7, 2025 the Company completed a public offering with warrants (“May 2025 Warrants”) to purchase of 507,812 . The May 2025 Warrants have an initial exercise price of $ 10.56 per share. and are exercisable for a term of five years on a date that is five years after the later of receiving the shareholder The number of shares of our Common Stock issuable upon exercise of the May 2025 Warrant Shares is subject to the following adjustments: (i) a 30% increase in the number of shares of Common Stock that would be issuable upon exercise of the May 2025 Warrants if a reverse stock split is effected prior to the expiration of the May 2025 Warrants (the “Reverse Stock Split Adjustment”), and (ii) subject to Warrant Stockholder Approval (as defined below), a decrease of the exercise price of the May 2025 Warrants, if in a subsequent offering of the Company’s securities the price paid for Common Stock, the exercise price of any options or warrants or the conversion price of any convertible securities issued in such subsequent offering is less than the exercise price immediately prior to such subsequent offering, to an exercise price that is equal to the lowest of the price paid for Common Stock, the exercise price of any options or warrants or the conversion price of any convertible securities issued in such subsequent offering (subject to a floor of $ 4.50 per share) and an increase in the number of shares of Common Stock underlying the May 2025 Warrants upon such exercise price reset so that the reset exercise price multiplied by the increased number of shares equals the aggregate proceeds that would have resulted from the full exercise of the May 2025 Warrants immediately prior to the reset (the “Anti-Dilution Adjustment”). After the adjustments the Company issued a total of 2,408,908 warrants related to the May 2025 Warrants at an exercise price of $ 4.50 . On August 13, 2025, the Company entered into a warrant inducement agreement with the holder of a warrant to purchase 15,000 shares of Common Stock originally issued on August 5, 2024 , with a current exercise price of $ 37.50 per share (the “August 2024 Warrant”) and a warrant to purchase 21,667 shares of Common Stock originally issued on October 21, 2024 with a current exercise price of $ 45.00 per share, pursuant to which the Holder agreed to exercise in cash the Existing Warrants at a reduced exercise price of $ 6.90 per share, for gross proceeds to the Company of $ 253,000 . As an inducement to such exercise, the Company agreed to issue to the holder unregistered warrants to purchase up to 47,666 shares of the Company’s Common Stock. The new warrants, which have an exercise price of $ 10.56 per share and will not become exercisable until the Company’s stockholders approve the issuance of shares of Common Stock. Following stockholder approval, the warrants have a term of five years. On August 13, 2025, the Company entered into a securities purchase agreement with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, (i) 990 shares of the Company’s newly designated Series B Convertible Preferred Stock, with a par value $ 0.001 per share and stated value of $ 1,000 per share initially convertible into 143,476 shares of the Company’s Common Stock, par value $ 0.007 per share at an initial conversion price of $ 6.90 per share and (ii) warrants to purchase up to 223,824 shares of the Company’s Common Stock at an exercise price of $ 10.56 per share of Common Stock. The following table summarizes the calculated aggregate fair values for the warrants issued in the two August offerings to be equity classified using the Black-Scholes method based on the following assumptions for the Offering: SUMMARY OF AGGREGATE FAIR VALUES FOR THE WARRANT ISSUED Exercise price per share of warrant $ 10.56 Fair market closing price per share of Common Stock $ 7.66 Volatility 153 % Expected term (years) 5 Risk-free interest rate 3.82 % Dividend yield 0 % The fair value of the warrants using the assumptions above was $143,315 for the inducement warrants and $604,483 for the warrants related to the Series B Convertible Preferred Stock, $113,976 for the change in fair value related to the change in exercise price in the inducement warrants. The fair value of the above warrants was recorded in Additional paid-in capital. As of September 30, 2025, there were tradeable warrants to purchase up to an aggregate of 53,374 shares of Common Stock outstanding and non-tradeable warrants to purchase an aggregate of up to 90,148 shares of Common Stock outstanding. SCHEDULE OF CLASS OF WARRANT Number of warrants issued Weighted- average exercise price Number of warrants exercised Number of warrants outstanding Pre-IPO convertible notes 96,616 $ 159.35 — 96,616 IPO tradeable 77,560 91.95 ( 24,186 ) 53,374 IPO non-tradeable 100,105 91.95 ( 10,366 ) 90,148 Direct offering March 8, 2024 53,530 37.50 ( 35,553 ) 17,777 Placement agent direct offering March 8, 2024 1,066 49.20 — 1,066 Inducement/direct offering August 5, 2024 58,402 — ( 58,402 ) — Placement agent direct offering August 5, 2024 1,659 45.00 — 1,659 Direct offering October 21, 2024 88,757 17.40 ( 59,544 ) 29,213 Warrant inducement February 25, 2025 97,538 25.50 — 97,538 Public offering May 7, 2025 2,408,908 4.50 ( 1,719,497 ) 689,411 August PIPE/Inducement offering August 13, 2025 271,490 10.56 — 271,490 Balance at September 30, 2025 3,255,840 $ 28.44 ( 1,907,548 ) 1,348,292 Note 15. SUBSEQUENT EVENTS In October 2025, the Company entered into definitive agreements for the purchase and sale of 720,000 shares of common stock, par value $ 0.007 per share, at a purchase price of $ 2.50 per share in a registered direct offering priced at-the-market under Nasdaq rules. The gross proceeds to the Company from the offering were approximately $ 1.8 million before deducting placement agent fees and other offering expenses payable by the Company. 18 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted. Company Overview Business We develop noninvasive diagnostics to detect early-stage lung cancer and other diseases of the lung using flow cytometry and automated analysis developed by machine learning, a form of AI. One of our diagnostic tests analyzes cell populations, including cancer and cancer-related cells, that are indicative of a specific diseased state. Our diagnostic test, CyPath ® Lung, addresses the need for noninvasive detection of early-stage lung cancer. Lung cancer is the leading cause of cancer-related deaths worldwide. Physicians order CyPath ® Lung to assist in their assessment of patients who are at high risk for lung cancer. The CyPath ® Lung test enables physicians to more confidently identify patients who will likely benefit from timely intervention and more invasive follow-up procedures and those who are likely without lung cancer and should continue screening in accordance with guidelines. CyPath ® Lung has the potential to increase overall diagnostic accuracy of lung cancer, which could lead to increased survival, fewer unnecessary invasive procedures, reduced patient anxiety, and lower medical costs. Commercial laboratory services, including CyPath ® Lung, are performed at our wholly owned subsidiary PPLS which we acquired by purchasing the assets of Village Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, that included the CAP-accredited and CLIA-certified commercial laboratory it owned. We own and operate the clinical anatomic and clinical pathology laboratory. CyPath ® Lung is offered for sale to physicians by PPLS. We continue to advance development of our flow cytometry+AI platform for diagnostic tests targeted at COPD and asthma. Diagnostics under development are designed to detect specific receptors in sputum that determine the effectiveness of new and emerging therapies for asthma and COPD that have proved to effectively treat some but not all patients. Through our wholly owned subsidiary, OncoSelect ® Therapeutics, LLC, we have conducted research that has led to discoveries and advancement of novel cancer therapeutic approaches that specifically and selectively target cancer cells. We continue to advance research and development for use of this technology for topical treatment of squamous cell skin cancer. We expect to present our findings at conferences and publish our research in peer-reviewed journals in the near future. We intend to seek strategic partners to develop our therapeutic discoveries which could result in broad-spectrum cancer treatments in the future. Research and optimization of our platform technologies are conducted in laboratories at our wholly owned subsidiary PPLS and leased laboratory space at The University of Texas at San Antonio. Current Year Financial Highlights Key financial results for the nine months ended September 30, 2025, include: ● CyPath ® Lung testing revenue increased approximately 86% to $619,000 as compared to $332,000 for the nine months ended September 30, 2024, due to an increase in total test results delivered to 775 for the nine months ended September 30, 2025. ● Sales of CyPath ® Lung reached a record high in the third quarter of 2025, representing a 95% increase over the previous quarter. The increase reflects growing adoption by Veterans’ hospitals and market expansion in the mid-Atlantic region. In the first nine months of 2025, sales of CyPath ® Lung rose 97% over the same period in 2024. ● The Company raised approximately $10.4 million in gross proceeds from equity transactions in the current quarter to fund operating activities. ● Primarily as a result of the Company’s targeted strategic actions to discontinue certain unprofitable pathology services, reduce costs through operational efficiency, and drive sales growth for CyPath ® Lung, consolidated revenue decreased approximately 36% to $4.6 million as compared to $7.2 million for the nine months ended September 30, 2024. 19 Recent Developments Financial Results On November 5, 2025, the Company announced sales of CyPath ® Lung saw consistent month-over-month and quarter-over-quarter growth. Tests processed in October 2025 continue the upward trend with completed tests representing a 111% increase over the monthly average for the first nine months of 2025. Third-quarter sales volume increased 95% over the prior quarter. Medical centers ordering multiple CyPath ® Lung tests increased 106% in the third-quarter compared to the prior quarter and increased by 67% in October compared to the 2025 year-to-date monthly average. Patient Case Studies Detection at Stage 1A followed by treatment offers a 95% 10-year survival rate as compared to the current overall 5-year survival rate of 26%, according to a NEJM study. In addition to the three case studies reported in July, 2025, in which CyPath ® Lung detected lung cancer at Stage 1A when existing treatments can be curative, the Company released details in September, 2025 of four patient case studies in which CyPath ® Lung was the critical factor in clinical decision making, including instances in which cancer was detected at Stage 1A. On September 26, 2025, the Company released details of three separate case studies – one in which use of CyPath ® Lung led to detecting lung cancer at Stage 1A, its earliest and possibly curative stage, and two where risky invasive procedures were avoided for patients facing difficult healthcare choices. On September 9, 2025, the Company released details of a case in which CyPath ® Lung identified lung cancer in a patient with difficult-to-diagnose ground-glass pulmonary nodules which shifted the course of care from watchful waiting for up to 5 years to confirmed malignancy and immediate treatment. Appointment of New Board Members On August 18, 2025, the Company announced the appointment of Roberto Rios, CPA, and John J. Oppenheimer, M.D., to its Board of Directors. Mr. Rios has more than four decades of executive leadership in corporate finance and governance across industries including biotechnology and medical devices, including financial leadership roles at ILEX Oncology, BioMedical Enterprises. Dr. Oppenheimer is the Director of Clinical Research at Pulmonary and Allergy Associates and Clinical Professor of Medicine at Rutgers and a leader in the diagnosis and treatment of asthma and COPD and an advisor to pharmaceutical companies focused on lung health. Patent Awards On October 16, 2025, the Company announced it received a notice of allowance from the U.S. Patent Office for its patent application that protects its diagnostic algorithm and test method to detect lung cancer. On October 28, 2025, the Company announced that the Australian Patent Office accepted a patent application for the Company’s proprietary platform technology for assessing lung health and predicting the likelihood of multiple lung diseases. Recent Financings All share and per-share amounts in the accompanying footnotes have been retroactively adjusted to reflect the Company’s 1-for-30 reverse stock split. In October 2025, the Company entered into definitive agreements for the purchase and sale of 720,000 shares of common stock, par value $0.007 per share, at a purchase price of $2.50 per share in a registered direct offering priced at-the-market under Nasdaq rules. The gross proceeds to the Company from the offering were approximately $1.8 million before deducting placement agent fees and other offering expenses payable by the Company. On September 29, 2025, the Company consummated a best efforts public offering of an aggregate of (i) 1,047,694 shares of Common Stock and (ii) pre-funded warrants to purchase up to 874,067 shares of Common Stock in lieu of shares of Common Stock. Each share was sold at a public offering price of $2.50. Each pre-funded warrant was sold at a public offering price of $2.493. The total gross proceeds for the transaction were approximately $4.8 million. On August 13, 2025, the Company entered into a securities purchase agreement with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell in a private placement (i) 990 shares of the Company’s newly designated Series B Convertible Preferred Stock, with a par value $0.001 per share and stated value of $1,000 per share, for gross proceeds to the Company of $990,000, which were initially convertible into 143,476 shares of the Company’s Common Stock at an initial conversion price of $6.90 per share and (ii) warrants to purchase up to 223,824 shares of the Company’s Common Stock at an exercise price of $10.56 per share of Common Stock. 20 On August 13, 2025, the Company entered into a warrant inducement agreement with the holder of a warrant to purchase 15,000 shares of Common Stock originally issued on August 5, 2024, with a current exercise price of $37.50 per share and a warrant to purchase 21,666 shares of Common Stock originally issued on October 21, 2024, with a current exercise price of $45.00 per share, pursuant to which the Holder agreed to exercise in cash the Existing Warrants at a reduced exercise price of $6.90 per share, for gross proceeds to the Company of $253,000. As an inducement to such exercise, the Company agreed to issue to the holder unregistered warrants (the “New Warrants”) to purchase up to 47,666 shares of the Company’s Common Stock. The New Warrants, which have an exercise price of $10.56 per share and will not become exercisable until the Company’s stockholders approve the issuance of shares of Common Stock. Nasdaq Compliance On August 7, 2025, the Company received notice from Nasdaq that it had not regained compliance with Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”) and was not eligible for a second 180-day compliance period as it did not comply with the minimum stockholders’ equity requirement for initial listing on the Nasdaq Capital Market. As a result, unless the Company requested an appeal by August 14, 2025, its securities would be scheduled for delisting from The Nasdaq Capital Market and would be suspended at the opening of business on August 18, 2025. On August 14, 2025, the Company submitted an appeal to Nasdaq which stayed the delisting and suspension of the Company’s securities pending the decision of the panel. On August 14, 2025, the Company received written notice from Nasdaq that its hearing has been scheduled for September 11, 2025. At the hearing, the Company presented its views and its plans to regain compliance with the Minimum Bid Price Rule and Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Rule”) to the panel. On September 18, 2025, Nasdaq granted us an extension until October 2, 2025 to demonstrate compliance with the Minimum Bid Price Rule and the Minimum Stockholders’ Equity Rule. On October 14, 2025, the Company received written notice from The Nasdaq Stock Market LLC stating that the panel has found the Company to be in compliance with the Minimum Bid Price Rule and the Minimum Stockholders’ Equity Rule. The letter also indicated that the Company will be subject to a mandatory panel monitor for a period of one year. If, within that one-year monitoring period, the Company fails to comply with the Minimum Stockholders’ Equity Rule, the Company will not be permitted additional time to regain compliance. However, the Company will have an opportunity to request a new hearing with the Nasdaq Hearings Panel prior to the Company’s securities being delisted from Nasdaq. Financial To date, we have devoted a substantial portion of our efforts and financial resources to the development of our diagnostic test, CyPath ® Lung. As a result, since our inception in 2014, we have funded our operations principally through private and public sales of our equity. As of September 30, 2025, we had cash and cash equivalents of $7.7 million. As of October 29, 2025, we had cash and cash equivalents of $8.4 million, which we expect will support our operations through May 2026. We have incurred significant losses and negative cash flows from operations since inception and expect to continue to incur losses and negative cash flows for the foreseeable future. Based on the Company’s current expected level of operating expenditures and the cash and cash equivalents on hand at September 30, 2025, management concludes that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying condensed consolidated financial statements. Prior to acquisition of the clinical pathology laboratory by PPLS, Village Oaks, under the trade name Precision Pathology Services, had licensed and developed CyPath ® Lung as a laboratory developed test (“LDT”) for sale to physicians. The license agreement provided that revenues from the sale would be split evenly between the Company and Village Oaks. In the second quarter of 2022, prior to the acquisition, we started to recognize revenue as part of a limited beta market testing program of the CyPath ® Lung test. We have never been profitable, and as of September 30, 2025, we had a working capital of approximately $6.3 million and an accumulated deficit of approximately $65.4 million. We expect to continue to incur significant operating losses for the foreseeable future as we continue the development of our diagnostic tests and advance our diagnostic tests through clinical trials. We anticipate raising additional cash needed through the private or public sales of equity or debt securities, collaborative arrangements, or a combination thereof to continue to fund our operations and develop our products. There is no assurance that any such collaborative arrangement will be entered into or that financing will be available to us when needed in order to allow us to continue our operations or, if available, on terms acceptable to us. If we do not raise sufficient funds in a timely manner, we may be forced to curtail operations, delay our clinical trials, cease operations altogether, or file for bankruptcy. 21 Results of Operations Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024 Net loss for the three months ended September 30, 2025, was approximately $5.1 million, compared to a net loss of approximately $2.0 million for the three months ended September 30, 2024. Revenue Since acquisition of the clinical pathology laboratory on September 19, 2023, additional revenue streams have been consolidated. PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. The Company recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered. For the Three Months Ended September 30, 2025 2024 Patient service fees 1 $ 1,172,948 $ 2,049,851 Histology service fees 255,586 281,861 Medical director fees 17,274 16,943 Department of Defense observational studies — 1,731 Other revenues 258 — Total net revenue $ 1,446,066 $ 2,350,386 1 Patient services fees include direct billing for CyPath ® Lung diagnostic tests as well as anatomical tests and pathology services unrelated to CyPath ® Lung including services discontinued due to unprofitability. Consolidated revenue decreased approximately $0.9 million, or 38%, to $1.5 million for the three months ended September 30, 2025, as compared to $2.4 million for the three months ended September 30, 2024, primarily as a result of the Company’s targeted strategic actions to discontinue certain unprofitable pathology services and drive sales growth for CyPath ® Lung. CyPath ® Lung testing revenue increased approximately $63,000, or 47%, to $296,000 for the three months ended September 30, 2025, compared to $133,000 for the three months ended September 30, 2024, as a result of a total of 385 test results delivered for the three months ended September 30, 2025, compared to 172 tests for the three months ended September 30, 2024. Operating Expenses Three Months Ended Change in 2025 September 30, Versus 2024 2025 2024 $ % Operating expenses: Direct costs and expenses $ 942,211 $ 1,440,158 $ (497,947 ) (35 )% Research and development 330,589 274,497 56,092 20 % Clinical development 143,311 93,705 49,606 53 % Selling, general and administrative 2,209,441 2,364,592 (155,151 ) (7 )% Depreciation and amortization 113,360 151,298 (37,938 ) (25 )% Total operating expenses $ 3,738,912 $ 4,324,250 $ (585,338 ) (14 )% Operating expenses totaled approximately $3.7 million and $4.3 million during the three months ended September 30, 2025 and 2024, respectively. The decrease in operating expenses is the result of the following factors: Direct costs and expenses Our direct costs and expenses are primarily direct labor for pathology services, laboratory supplies and reagents, laboratory equipment, and allocated shared facilities. Direct costs and expenses totaled $0.9 million and $1.4 million during the three months ended September 30, 2025 and 2024, respectively. The decrease of approximately $0.5 million for 2025 compared to 2024 was primarily attributable to the targeted strategic actions which occurred in March 2025, aimed at streamlining operations and reducing costs related to our lab operations. 22 Research and Development Expenses Our research and development expenses consist primarily of expenditures for lab operations, preclinical studies, compensation, and consulting costs. Research and development expenses totaled approximately $331,000 and $275,000 for the three months ended September 30, 2025 and 2024, respectively. The increase of approximately $56,000, or 20%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to an increase project costs as we continue to advance development for diagnostic tests targeted at COPD and asthma. Clinical Development Clinical development expenses totaled approximately $143,000 and $94,000 for the three months ended September 30, 2025 and 2024, respectively. The increase of approximately $49,000, or 53%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to an increase in professional fees in 2025 related to managing our clinical strategy for our pivotal clinical trial. Selling, General and Administrative Our selling, general and administrative expenses consist primarily of expenditures related to employee compensation, selling and marketing costs, legal, accounting, tax and other professional services, and general operating expenses. Selling, general and administrative expenses totaled approximately $2.2 million and $2.4 million for the three months ended September 30, 2025 and 2024, respectively. The decrease of approximately $0.2 million, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to a decrease in general and administrative costs related to lab operations as a result of our targeted strategic actions which occurred in March 2025, aimed at streamlining operations and reducing costs. These decreases were partially offset by an increase in employee compensation related to the addition of additional personnel and support services to support sales of our diagnostic test, CyPath ® Lung. Depreciation and Amortization Depreciation and amortization expenses totaled approximately $113,000 and $151,000 for the three months ended September 30, 2025 and 2024, respectively. The decrease of approximately $38,000, or 25%, for the three months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to the termination of a financing lease in April 2025 due to the Company’s targeted strategic actions announced in March, 2025. Other Income (Expense) Three Months Ended Change in 2025 September 30, Versus 2024 2025 2024 $ % Interest (expense) income, net $ (4,270 ) $ (19,403 ) $ 15,133 78 % Other income (expense), net (3,326 ) (5,014 ) 1,688 34 % Gain (loss) on remeasurement of warrant liabilities (2,747,460 ) — (2,747,460 ) — % Total other (expense) income $ (2,755,056 ) $ (24,417 ) $ (2,730,639 ) 11,183 % Total other income (expense), net totaled ($2.8 million) and approximately ($24,000) for the three months ended September 30, 2025 and 2024, respectively. The increase in the total other expenses of approximately $2.7 million is mostly attributable to the remeasurement of warrant liability, which was reclassified as equity after completion of certain events which prevented for equity classification. Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024 Net loss for the nine months ended September 30, 2025, was approximately $11.8 million, compared to a net loss of approximately $6.0 million for the nine months ended September 30, 2024. 23 Revenue Since acquisition of the clinical pathology laboratory on September 19, 2023, additional revenue streams have been consolidated. PPLS generates three sources of revenue: (1) patient service fees, (2) histology service fees, and (3) medical director fees. The Company recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered. For the Nine Months Ended September 30, 2025 2024 Patient service fees 1 $ 3,685,397 $ 6,259,806 Histology service fees 827,944 811,914 Medical director fees 51,171 50,136 Department of Defense observational studies — 8,654 Other revenues 4,634 23,919 Total net revenue $ 4,569,146 $ 7,154,429 1 Patient services fees include direct billing for CyPath ® Lung diagnostic tests and anatomical testing and pathology services wholly unrelated to CyPath ® Lung including those services discontinued due to unprofitability. Consolidated revenue decreased approximately $2.6 million, or 36%, to $4.6 million for the nine months ended September 30, 2025, as compared to $7.2 million for the nine months ended September 30, 2024, primarily as a result of the Company’s targeted strategic actions to discontinue certain unprofitable pathology services and drive sales growth for CyPath ® Lung. CyPath ® Lung testing revenue increased approximately $287,000, or 86%, to $619,000 for the nine months ended September 30, 2025, compared to $332,000 for the nine months ended September 30, 2024, as a result of a total of 775 test results delivered for the nine months ended September 30, 2025, compared to 393 tests for the nine months ended September 30, 2024. Operating Expenses Nine Months Ended Change in 2025 September 30, Versus 2024 2025 2024 $ % Operating expenses: Direct costs and expenses $ 3,326,673 $ 4,421,309 $ (1,094,636 ) (25 )% Research and development 1,009,347 1,070,569 (61,222 ) (6 )% Clinical development 410,943 194,127 216,816 112 % Selling, general and administrative 6,876,551 7,023,311 (146,760 ) (2 )% Depreciation and amortization 381,177 452,005 (70,828 ) (16 )% Total operating expenses $ 12,004,691 $ 13,161,321 $ (1,156,620 ) (9 )% Operating expenses totaled approximately $12.0 million and $13.2 million during the nine months ended September 30, 2025 and 2024, respectively. The decrease in operating expenses is the result of the following factors: Direct costs and expenses Our direct costs and expenses are primarily direct labor for pathology services, laboratory supplies and reagents, laboratory equipment, and allocated shared facilities. Direct costs and expenses totaled approximately $3.3 million and $4.4 million during the nine months ended September 30, 2025 and 2024, respectively. The decrease of approximately $1.1 million for 2025 compared to 2024 was primarily attributable to the targeted strategic actions which occurred in March 2025, aimed at streamlining operations and reducing costs related to our lab operations. Research and Development Expenses Our research and development expenses consist primarily of expenditures for laboratory operations, preclinical and clinical studies, compensation, and consulting costs. Research and development expenses totaled $1.0 million and $1.1 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease of approximately $0.1 million, or 6%, for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to a decrease in compensation costs and benefits and lab supplies. Clinical Development Clinical development expenses totaled approximately $0.4 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively. The increase of approximately $0.2 million, or 112%, for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to an increase in professional fees in 2025 related to managing our clinical strategy for our pivotal clinical trial. Selling, General and Administrative Our selling, general and administrative expenses consist primarily of expenditures related to employee compensation, selling and marketing costs, legal, accounting and tax, and other professional services, and general operating expenses. Selling, general and administrative expenses totaled approximately $6.9 million and $7.0 million for each of the nine months ended September 30, 2025 and 2024, respectively. Our selling, general and administrative costs stayed level as a result of decreases from targeted strategic actions aimed at streamlining operations and reducing costs in our lab operations, offset by increases in employee compensation related to the addition of personnel and support services to support sales of our diagnostic test, CyPath ® Lung. 24 Depreciation and Amortization Depreciation and amortization expenses totaled approximately $381,000 and $452,000 for the nine months ended September 30, 2025 and 2024, respectively. The decrease of approximately $71,000, or 16%, for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to the termination of a financing lease in April 2025 due to the Company’s targeted strategic actions announced in March 2025. Nine Months Ended Change in 2025 September 30, Versus 2024 2025 2024 $ % Interest (expense) income, net $ (27,648 ) $ (58,889 ) $ 26,241 49 % Other income (expense), net (457,956 ) (503 ) (457,453 ) (90,945 )% Gain (loss) on remeasurement of warrant liabilities (3,810,278 ) — (3,810,278 ) — % Total other (expense) income $ (4,295,882 ) $ (54,392 ) $ (4,241,490 ) 7,998 % Other Income (Expense) Total other income (expense), net totaled ($4.3 million) and approximately $(54,000) for the nine months ended September 30, 2025 and 2024, respectively. The increase in total other expenses of approximately $4.2 million is mostly attributable to the remeasurement of warrant liability and offering costs related to the May public offering, which was further reclassified as equity after the completion of certain events which prevented equity classification. Liquidity, Capital Resources, and Going Concern To date, we have funded our operations primarily through our IPO, exercise of stock options and warrants, and the sale of our securities, resulting in gross proceeds of approximately $58.2 million. We have evaluated whether there are conditions and events that raise substantial doubt about our ability to continue as a going concern for at least one year after the date the condensed consolidated financial statements are issued. We have incurred losses since our inception in 2014 as a result of significant expenditures for operations and research and development and, prior to April 2022, the lack of any approved diagnostic test or therapeutic products to generate revenue. For the nine months ended September 30, 2025 and 2024, we had net losses of $11.8 million and $6.1 million, respectively, and we expect to incur substantial additional losses in future periods. We have an accumulated deficit of approximately $65.4 million as of September 30, 2025. Despite our recent financing in the third quarter of 2025 in which we raised gross proceeds of $10.4 million, we believe our current cash and anticipated revenue from operations will be sufficient to support our operations through May 2026. Based on our current expected level of operating expenditures, current expected levels of revenue, and the cash and cash equivalents on hand at September 30, 2025, of $7.7 million, management concludes that there is substantial doubt about our ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report. We need to raise further capital through the sale of additional equity or debt securities or other debt instruments, strategic relationships or grants, or through exercised outstanding warrants to support our future operations unless our revenue increases significantly. Our business plan includes expansion for our commercialization efforts which will require additional funding. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives. We continue to seek sources of financing to fund our continued operations and research and development programs. To raise additional capital, we may sell additional equity or debt securities, or enter into collaborative, strategic, and/or licensing transactions. There can be no assurance that we will be able to complete any financing transaction in a timely manner or on acceptable terms or otherwise enter into a collaborative or strategic transaction. If we are not able to raise additional cash, we may be forced to delay, curtail, or cease development of our diagnostic tests or therapeutic products, or cease operations altogether. Summary Statements of Cash Flows The following information reflects cash flows for the periods presented: Nine Months Ended September 30, 2025 2024 Cash and cash equivalents at beginning of period $ 1,105,291 $ 2,821,570 Net cash used in operating activities (6,769,279 ) (5,587,634 ) Net cash used in investing activities (60,567 ) (79,082 ) Net cash provided by financing activities 13,393,750 3,601,726 Cash and cash equivalents at end of period $ 7,669,195 $ 756,580 Net Cash Used in Operating Activities Net cash used in operating activities was approximately $6.8 million and $5.6 million for the nine months ended September 30, 2025 and 2024, respectively. The increase of approximately $1.2 million in cash used by operations during the nine months ended September 30, 2025, compared to the same period in 2024 was primarily attributable to an increase of $5.7 million in our loss from operations, a decrease in accounts payable and accrued expenses by $0.4 million offset by a decrease in accounts receivable by $1.2 million compared to the prior year, and a fair value adjustment to the warrant liability by $3.8 million related to the May 2025 warrant agreement. 25 Net Cash Used in Investing Activities We used approximately $60,000 for the nine months ended September 30, 2025, in investing activities related primarily to purchase of computer and lab equipment, compared to approximately $80,000 used in investing activities for the nine months ended September 30, 2024. Net Cash Provided by Financing Activities Cash provided in financing activities was approximately $13.4 million compared to cash provided by financing activities of approximately $3.6 million for the nine months ended September 30, 2025 and 2024, respectively. The change in proceeds from prior year was primarily related to net proceeds from the equity transactions of $13.7 million offset by payments for loans and finance leases of $0.3 million, compared to the prior year of equity transactions of $3.6 million offset by payments for loans and finance leases of approximately $18,000. Contractual Obligations and Commitments We enter into contracts in the normal course of business with third-party contract organizations for clinical trials and other services and products used for research and development and operating purposes. These contracts generally provide for termination following a certain period after notice, and therefore we believe that any non-cancellable obligations under these agreements are not material. Critical Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these significant judgments and estimates on historical experience and other assumptions it believes to be reasonable based upon information presently available. Actual results could differ from those estimates under different assumptions, judgments, or conditions. Patient Fee Revenues We follow ASC 606, Revenue from Contracts with Customers , which requires revenue recognition in the period in which the service was performed. To be able to report timely net revenues for the period, estimates are used for a portion of uncollected balances. The Company follows a standard process, which considers historical denial and collection experience and other factors (including the period of time that the receivables have been outstanding), to estimate contractual allowances and implicit price concessions, recording adjustments in the current period as changes in estimates. The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation. Patient Fee Receivables and Considerations for Credit Losses We follow accounting considerations of Current Expected Credit Loss (“CECL”) - Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. With the acquisition of PPLS and control of Village Oaks, the Company’s board-certified pathologists provide anatomic and clinical pathology services for patients and other customers. The Company’s other customer types include contract research organizations (“CROs”), hospitals, and independent laboratories. The majority of the Company’s revenues stem from fees for services provided to patients, and thus in those arrangements, the patient is the customer, although the services may be requested by a physician on the patient’s behalf. Furthermore, in addition to its contracts with patients, the Company separately contracts with third-party payors (insurance companies and governmental payors), who are typically responsible for all or the majority of the fees agreed upon for such services provided to patients. Historically, material amounts of gross charges are not collected due to various agreements with insurance companies, capped pricing levels for government payors, and uncollectible balances from individual payors. To estimate these allowances of credit losses, the Company assesses the portfolio risk segments and historical data on collection rates. These estimated allowances offset patient revenues and accounts receivables. Discount Rate for Finance Leased Equipment We follow ASC 842, Leases . In February 2016, the FASB issued Topic ASC 842, under which a lessee is required to recognize most leases on its balance sheet. We have elected to apply a third-party valuation incremental borrowing rate (“IBR”) as the discount rate by class of underlying assets when the rate is not implicit in the lease. Stock-Based Compensation We follow ASC 718, Compensation – Stock Compensation , which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors, and non-employees based on estimated fair values. We have used the Black-Scholes option pricing model to estimate grant date fair value for all option grants. The assumptions we use in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Since we use different assumptions based on a change in factors, our stock-based compensation expense could be materially different in the future. Accounting for Income Taxes We are governed by U.S. income tax laws, which are administered by the Internal Revenue Service. We follow ASC 740, Accounting for Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible. 26 Going Concern Our evaluation of our ability to continue as a going concern requires us to evaluate our future sources and uses of cash sufficient to fund our currently expected operations and research and development activities one year from the date our consolidated financial statements are issued. We evaluate the probability associated with each source and use of cash resources in making our going concern determination. The research and development of our diagnostic tests and therapeutic products are inherently subject to uncertainty. Off-Balance Sheet Arrangements We do not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, as a part of our ongoing business. Accordingly, we did not have any off-balance sheet arrangements during any of the periods presented. Emerging Growth Company Status We are both an “emerging growth company” and a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are therefore subject to reduced public company reporting requirements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a smaller reporting company, pursuant to Item 305(e) of Regulation S-K promulgated under the Securities Act, we are not required to provide the information required by this Item 3. ITEM 4. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures The 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 Quarterly Report, is collected, recorded, processed, summarized, and reported within the time periods specified under the rules of the SEC. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. We have adopted and maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized, and reported within the time periods specified in the rules of the SEC. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. As of September 30, 2025, the end of the period covered by this Quarterly Report, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Exchange Act. The Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our disclosure controls and procedures as of September 30, 2025. Based on their assessment, they have concluded that as of September 30, 2025, our disclosure controls and procedures are effective. Changes in Internal Control over Financial Reporting There 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 three months ended September 30, 2025, the period covered by this Quarterly Report, that could materially affect, or are reasonably likely to materially affect, our internal control over financial reporting. 27 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. From time to time, we are involved in various disputes and litigation matters that arise in the ordinary course of business. To date, we have had no material pending legal proceedings, and we are not engaged in any legal proceedings that are expected, individually or in the aggregate, to have a material adverse impact on our financial position or results of operations. ITEM 1A. RISK FACTORS. In addition to other information set forth in this Quarterly Report, you should carefully consider the “Risk Factors” discussed in the 2024 Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this Quarterly Report. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial might materially adversely affect our actual business, financial condition, and operating results. The following information updates and should be read in conjunction with the information disclosed in Part I, Item 1A, “Risk Factors,” contained in our 2024 Form 10-K. Except as disclosed below, there have been no material changes from the risk factors disclosed in our 2024 Form 10-K. Risks Related to Our Financial Position Our business plan relies upon our ability to obtain additional sources of capital and financing. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, we may be required to cease operations. Prior to 2022, we had not generated any revenue. During the nine months ended September 30, 2025, we generated revenue of approximately $4.6 million, and $9.4 million during the year ended December 31, 2024. To become and remain profitable, we must succeed in generating additional laboratory revenue and developing and commercializing our diagnostic tests and therapeutic products that we expect will generate significant income in the planned timeframe. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of our diagnostic and therapeutic technologies, obtaining regulatory approval for our diagnostic and therapeutic technologies, manufacturing, marketing, and selling any diagnostic tests and therapeutic products for which we may obtain regulatory approval, and establishing and managing our collaborations at various phases of each diagnostic test and therapeutic product candidate’s development. We are in the preliminary phases of these activities. We may never succeed in these activities and, even if we do, may never generate sufficient income to achieve profitability. To become profitable, we must develop our diagnostic tests and therapeutic products, which will depend in large part on our ability to: ● Develop, enhance, and protect our diagnostic tests and therapeutic products; ● Raise sufficient funding to support our diagnostic tests and therapeutic product development program(s); ● Complete pre-clinical testing of new diagnostic and therapeutic products; 28 ● Expand commercialization of CyPath ® Lung as an LDT under the CAP/CLIA guidelines and regulations administered by CMS and CAP and/or, if and when we obtain clearance from FDA for our CyPath ® Lung test, to expand sales in accordance with FDA rules and regulations. ● Develop and commercialize CyPath ® Lung as a CE-marked test in accordance with the In Vitro Diagnostic Regulation (“IVDR”) of the European Union (“EU”); ● Conduct research studies resulting in scientific results required to successfully develop therapeutic products based on our discoveries that the knockdown of certain cell receptors results in cancer death without harm to healthy tissue; ● Develop and conduct human clinical studies to support the regulatory approval and marketing of our diagnostic test(s) and therapeutic product(s); ● Develop and manufacture the test(s) and product(s) to FDA standards, appropriate EU standards, and appropriate standards required for the commercialization of our tests and products in countries in which we seek to sell our diagnostic test(s) and therapeutic product(s); ● Obtain the necessary regulatory approvals to market our diagnostic test(s) and therapeutic product(s); ● Secure the necessary personnel and infrastructure to support the development, commercialization, and marketing of our diagnostic test(s) and therapeutic product(s); and ● Develop strategic relationships to support development, manufacturing, and marketing of our diagnostic test(s) and therapeutic product(s). Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress our value and could impair our ability to raise capital, expand our business, maintain the research and development efforts, diversify our diagnostic tests and therapeutic product offerings, or even continue operations. A decline in our value could also cause you to lose all or part of your investment. We must raise additional capital to fund our operations in order to continue as a going concern. As of September 30, 2025, we had an accumulated deficit of $65.4 million and $7.7 million cash on hand. As of October 29, 2025, our cash and cash equivalents were $8.4 million. Despite our recent financings, we will 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 our future operations. Our business plan includes expansion for our commercialization efforts which will require additional funding. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. Without funding from the proceeds of a capital raise or strategic relationship or grant, management anticipates that our cash resources are sufficient to continue operations through May 2026. Based on our current expected level of operating expenditures, current expected levels of revenue, and the cash and cash equivalents on hand at September 30, 2025, of $7.7 million, management concludes that there is substantial doubt about our ability to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the development of new business opportunities. There can be no assurance that we will be successful in accomplishing these objectives. Without such additional capital, we may be required to curtail or cease operations and be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment. WithumSmith+Brown, PC, our independent registered public accounting firm for the fiscal year ended December 31, 2024, has included an explanatory paragraph in its opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2024, indicating that our current liquidity position raises substantial doubt about our ability to continue as a going concern. We are unable to precisely estimate when we will begin to generate significant profit from revenue, if ever, from PPLS’ services, the amount of profit or revenue that will be generated, or the expenses that will be incurred. Since its acquisition in September 2023, we have generated $16.4 million in revenue from PPLS. Once we begin to generate profit from revenue, there is no guarantee that it will be sufficient to realize the expected financial benefits of the acquisition. In addition, since we have limited experience operating a clinical laboratory, we may not accurately estimate the expenses we will incur. 29 Risks Related to Ownership of Our Common Stock and Warrants Our failure to maintain compliance with the continued listing requirements of The Nasdaq Capital Market could result in a de-listing of our Common Stock. The shares of our Common Stock are currently listed for trading on The Nasdaq Capital Market under the symbol “BIAF” and our tradeable warrants are listed for trading on The Nasdaq Capital Market under the symbol “BIAFW.” We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum stockholders’ equity of $2.5 million and a minimum closing bid price of $1.00 per share or risk delisting, which would have a material adverse effect on our business. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our securities on The Nasdaq Capital market. For example, on February 7, 2025, we received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that for the preceding 30 consecutive business days (December 23, 2024, through February 6, 2025), our Common Stock did not maintain a minimum closing bid price of $1.00 (“Minimum Bid Price Requirement”) per share as required by Nasdaq Listing Rule 5550(a)(2). Therefore, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided 180 calendar days, or util August 6, 2025, to regain compliance with the rule. In addition, on May 27, 2025 we received written notice from the Staff stating that we were not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Continued Listing Equity Requirement”) because our stockholders’ equity of $1,439,404 as of March 31, 2025, as reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2025, was below the minimum requirement of $2,500,000. Pursuant to Nasdaq’s Listing Rules, we had 45 calendar days to submit a plan to regain compliance (a “Compliance Plan”) with the Continued Listing Equity Requirement. On July 14, 2025, the Company submitted its plan to regain compliance with the Continued Listing Equity Requirement. On August 7, 2025, we received written notice from the Listing Qualifications Staff of Nasdaq that we had not regained compliance with the Minimum Bid Price Requirement by August 6, 2025 and were not eligible for a second 180-day compliance period as we did not comply with the minimum stockholders’ equity requirement for initial listing on the Nasdaq Capital Market. As a result, unless we requested an appeal to a hearings panel (the “Panel”) by August 14, 2025, our securities would be scheduled for delisting from The Nasdaq Capital Market and would be suspended at the opening of business on August 18, 2025. We submitted an appeal to Nasdaq on August 14, 2025, which stayed the delisting and suspension of the Company’s securities pending the decision of the Panel. On August 14, 2025, we received written notice from Nasdaq that our hearing has been scheduled for September 11, 2025. At the hearing, the Company presented its views and its plans to regain compliance with the Minimum Bid Price Requirement and the Continued Listing Equity Requirement to the Panel. On September 18, 2025, Nasdaq granted us an extension until October 2, 2025 to demonstrate compliance with the Minimum Bid Price Requirement and Continued Listing Equity Requirement. On October 14, 2025, the Company received a letter from Nasdaq stating that the Panel had found the Company to be in compliance with Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”) and 5550(b)(1) (the “Minimum Stockholders’ Equity Rule”). The letter also indicated that the Company will be subject to a mandatory panel monitor for a period of one year. If, within that one-year monitoring period, the Company fails to comply with the Minimum Stockholders’ Equity Rule, the Company will not be permitted additional time to regain compliance. However, the Company will have an opportunity to request a new hearing with the Nasdaq Hearings Panel prior to the Company’s securities being delisted from Nasdaq. 30 There is no assurance that we will maintain compliance with the minimum listing requirements with all applicable requirements for continued listing on Nasdaq. If our securities were delisted from Nasdaq, trading of our securities would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our securities on an over-the-counter market, and many investors would likely not buy or sell our securities due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our securities would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Stock is listed on The Nasdaq Capital Market, it is a covered security. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were to be delisted from The Nasdaq Capital Market, our Common Stock would cease to be recognized as a covered security, and we would be subject to regulation in each state in which we offer our securities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our securities, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. ITEM 5. OTHER INFORMATION. Rule 10b5-1 Trading Plans During the fiscal quarter ended September 30, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.” 31 ITEM 6. EXHIBITS. Exhibit No. Title of Document 31.1* Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 31.2* Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 32.1** Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document * 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File – the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 is formatted in Inline XBRL * Filed herewith. ** Furnished herewith. 32 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BIOAFFINITY TECHNOLOGIES, INC. Date: November 14, 2025 By: /s/ Maria Zannes Maria Zannes Chief Executive Officer, President, Founder, and Director (Principal Executive Officer) Date: November 14, 2025 By: /s/ J. Michael Edwards J. Michael Edwards Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 33