What changed in this filing

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Item 9A. Controls and Procedures

2026-03-16 compared with 2025-03-31 · 627 added, 477 removed, 624 unchanged (64% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

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

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

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

As of December 31, 2024, the end of the period

covered by this Annual 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 December 31, 2024.

Based on their assessment, they

have concluded that, as of December 31, 2024, our disclosure controls and procedures are effective.

principal executive officer and principal financial officer evaluated the effectiveness of our “disclosure controls and procedures”

as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K.

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 under the Exchange Act is recorded, processed,

summarized and reported, within the time periods specified in the SEC’s rules and forms.

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 under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive

officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating

the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated,

cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute

assurance that all control issues and instances of fraud, if any, within a company have been detected.

Based on the evaluation of our

disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that,

as of such date, our disclosure controls and procedures were effective.

Control over Financial Reporting

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Therefore, it is possible to design

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

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

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

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our evaluation, we concluded that our internal control over financial reporting was effective as of December 31, 2025.

of December 31, 2024, we are a non-accelerated filer, and our independent registered accounting firm is not required to issue an

attestation report on our internal control over financial reporting .

of December 31, 2025, we are a non-accelerated filer, and our independent registered public accounting firm is not required to issue

an attestation report on our internal control over financial reporting .

Other Information.

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Directors, Executive Officers, and Corporate Governance.

information required by this item of this Annual Report will be included under the caption “Directors, Executive Officers, and

Corporate Governance” in our 2025 Proxy Statement, and is incorporated by reference herein.

information required by this item is incorporated herein by reference to the Proxy Statement.

Executive Compensation.

information required by this item of this Annual Report will be included under the caption “Executive and Director Compensation”

in our 2025 Proxy Statement, and is incorporated by reference herein.

information required by this item is incorporated herein by reference to the Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

information required by this item of this Annual Report will be included in our 2025 Proxy Statement and is incorporated by reference

information required by this item is incorporated herein by reference to the Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence.

information required by this item of this Annual Report will be included under the captions “Certain Relationships and Related

Party Transactions” and “Board of Directors and Corporate Governance – Director Independence” in our 2025 Proxy

Statement and is incorporated by reference herein.

information required by this item is incorporated herein by reference to the Proxy Statement.

Principal Accountant Fees and Services.

information required by this item of this Annual Report will be included in our 2025 Proxy Statement and is incorporated by reference

information required by this item is incorporated herein by reference to the Proxy Statement.

Exhibit and Financial Statement Schedules.

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001-41463) filed with the SEC on October 21, 2024)

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

001-41463) filed with the SEC on August 14, 2025)

Certificate of Designations of Series B Convertible Preferred Stock (Incorporated by reference as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Certificate of Amendment to Certificate of Incorporation of bioAffinity Technologies, Inc.

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

001-41463) filed with the SEC on September 17, 2025)

Form of Registrant’s Common Stock Certificate (Incorporated by reference as Exhibit 4.1 to the Registrant’s Form S-1/A filed with the SEC on June 16, 2022)

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Form of Placement Agent Warrant (Incorporated by reference as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 8, 2024)

Description of Securities

Description of Securities (Incorporated by reference as Exhibit 4.13 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2025)

Form of Purchase Warrant (Incorporated by reference as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

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001-41463) filed with the SEC on February 27, 2025)

Form of April 2025 Warrant (Incorporated by reference as Exhibit 4.19 to the Registrant’s Form S-1 filed May 2, 2025)

Form of Pre-Funded Arrant (Incorporated by reference as Exhibit 4.20 to the Registrant’s Form S-1 filed May 2, 2025)

Form of Placement Agent Warrant (Incorporated by reference as Exhibit 4.21 to the Registrant’s Form S-1 filed May 2, 2025)

Form of Warrant Agent Agreement for the April 2025 Warrants (Incorporated by reference as Exhibit 4.22 to the Registrant’s Form S-1 filed May 2, 2025)

Form of Pre-Funded Warrant (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 8, 2025)

Form of May 2025 Warrant (Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 8, 2025)

Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 8, 2025)

Form of Warrant (Incorporated by reference as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Form of Placement Agent Warrant (Incorporated by reference as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Form of New Warrant (Incorporated by reference as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Form of Warrant Amendment (Incorporated by reference as Exhibit 4.4 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Form of May 2025 Warrant Amendment (Incorporated by reference as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 2, 2025)

Form of August 2025 Warrant Amendment (Incorporated by reference as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 2, 2025)

Form of Pre-Funded Warrant (Incorporated by reference as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 30, 2025)

2014 Equity Incentive Plan of Registrant, as amended.

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001-41463) filed with the SEC on February 27, 2025)

Form of Securities Purchase Agreement (Incorporated by reference as Exhibit 10.42 to the Registrant’s Form S-1 filed May 2, 2025)

Placement Agency Agreement, dated as of May 5, 2025, by and between bioAffinity Technologies, Inc.

and WallachBeth Capital LLC (Incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 8, 2025)

Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 8, 2025)

At-The-Market Issuance Sales Agreement by and between bioAffinity Technologies, Inc.

and WallachBeth Capital LLC (Incorporated by reference as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on May 27, 2025)

Placement Agency Agreement dated August 13, 2025 (Incorporated by reference as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

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

001-41463) filed with the SEC on August 14, 2025)

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

001-41463) filed with the SEC on August 14, 2025)

Form of Warrant Inducement Agreement (Incorporated by reference as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Financial Advisory Agreement dated August 13, 2025 (Incorporated by reference as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on August 14, 2025)

Placement Agency Agreement dated as of September 25, 2025, by and between bioAffinity Technologies, Inc.

and WallachBeth Capital LLC (Incorporated by reference as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on September 30, 2025)

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

001-41463) filed with the SEC on September 30, 2025)

Placement Agency Agreement, dated October 8, 2025, by and between bioAffinity Technologies Inc.

and WallachBeth Capital LLC (Incorporated by reference as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on October 9, 2025)

Form of Securities Purchase Agreement, dated as of October 8, 2025, by and between the Company and the purchasers listed on the signature pages thereto (Incorporated by reference as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

001-41463) filed with the SEC on October 9, 2025)

Code of Business Conduct of the Registrant (Incorporated by reference as Exhibit 14.1 to the Registrant’s Form S-1 filed with the SEC on May 25, 2022)

and Restated Insider Trading Policy of the Registrant

Amended and Restated Insider Trading Policy of the Registrant (Incorporated by reference as Exhibit 19.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2025)

List of Subsidiaries of the Registrant (Incorporated by reference as Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on April 1, 2024)

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

on its behalf by the undersigned, thereunto duly authorized on the 31 st day of March, 2025.

on its behalf by the undersigned, thereunto duly authorized on the 13 th day of March, 2026.

Technologies, Inc.

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Robert Anderson

Stuart Diamond

Roby Joyce, M.D.

John Oppenheimer

Technologies, Inc.

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Consolidated Statements of Operations for the years ended December 31, 2025 and 2024

Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the years ended December 31, 2024 and 2023

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 and 2024

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024

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

(the “Company”) as of

December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’ equity, and cash

flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the

“consolidated financial statements”).

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

material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results

of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with principles generally accepted in the United States of America.

Substantial Doubt Regarding the Company’s

Ability to Continue as a Going Concern

(the “Company”)

as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity and cash

flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated

financial statements”).

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

position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in

the period ended December 31, 2025, in conformity with principles generally accepted in the United States of America.

Doubt Regarding the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements

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financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

Our responsibility is to express an opinion

on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to

obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness

of the Company’s internal control over financial reporting.

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

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

WithumSmith+Brown, PC

have served as the Company’s auditor since 2021.

York, New York

ID Number 100

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

/s/ WithumSmith+Brown,

We have served as the Company’s

auditor since 2021.

New York, New York

March 13, 2026

PCAOB ID Number 100

Technologies, Inc.

Balance Sheets

as of December 31, 2024 and 2023

of December 31, 2025 and 2024

Current assets:

cash equivalents

Accounts and other receivables,

expenses and other current assets

Cash and cash equivalents

Accounts and other receivables, net

Prepaid expenses and other current assets

Total current assets

Non-current assets:

Property and equipment,

Operating lease right-of-use

Finance lease right-of-use

Property and equipment, net

Operating lease right-of-use asset, net

Finance lease right-of-use asset, net

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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Unearned revenue

Operating lease liability,

current portion

Finance lease liability,

current portion

payable, current portion

Operating lease liability, current portion

Finance lease liability, current portion

Notes payable, current portion

Total current liabilities

Non-current liabilities

Operating lease liability,

net of current portion

Finance lease liability,

net of current portion

Operating lease liability, net of current portion

Finance lease liability, net of current portion

Notes payable, net of current portion

Total liabilities

Commitments and contingencies (See Note

Commitments and contingencies (Note 11)

Stockholders’ equity:

Preferred stock, no

shares issued or outstanding at December 31, 2024 and 2023, respectively

Preferred stock, $ 0.001

shares authorized;

shares issued and outstanding at December 31, 2025 and 2024, respectively

Common Stock, par value $ 0.007

$ 0.007 per share;

350,000,000 shares authorized;

15,576,674 and 9,394,610 shares issued and outstanding as of December 31, 2024 and

2023, respectively

and 519,158 issued and outstanding at December

31, 2025 and 2024, respectively( 1 )

Additional paid-in capital(1)

Accumulated deficit

( 68,554,064 )

( 53,644,310 )

stockholders’ equity

Total liabilities, and

stockholders’ equity

Total stockholders’ equity

Total liabilities and stockholders’ equity

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.

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

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Clinical development

Selling, general and

administrative

and amortization

operating expenses

from operations

Selling, general and administrative

Depreciation and amortization

Total operating expenses

Loss from operations

( 10,572,508 )

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Other expense

before income taxes

Change in fair value of warrants issued

( 3,810,278 )

Loss before income tax expense

( 14,865,712 )

( 9,028,181 )

Income tax expense

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Weighted average common shares outstanding (2)

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.

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

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the Years Ended December 31, 2025 and 2024

Preferred Stock

Common Stock (3)

Stockholders’

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Stock-based compensation

Stock issued in connection with the acquisition

Exercise of stock options

Exercise of stock warrants

Sale of Common Stock

Offering Costs

( 1,261,898 )

Balance at December 31, 2023

( 9,039,381 )

( 9,039,831 )

Balance at December 31, 2024

$ ( 53,644,310 )

Stock-based compensation

Exercise of stock options

Exercise of stock warrants

Sale of common stock

Exercise of stock warrants

Issuance of preferred stock

Conversion of preferred stock

Offering costs

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( 1,771,939 )

Reclass of warrant liability to equity

( 14,909,754 )

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$ ( 68,554,064 )

$ ( 53,644,310 )

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.

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

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the Years Ended December 31, 2025 and 2024

Cash flows from operating

Cash flows from operating activities

$ ( 14,909,754 )

$ ( 9,039,831 )

Adjustments to reconcile

net loss to net cash used in operating activities:

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

Depreciation and amortization

Stock-based compensation

Changes in operating

assets and liabilities:

Stock-based compensation expense

Fair value adjustment on warrants

Changes in operating assets and liabilities:

Accounts and other receivables

Prepaid expenses and

Prepaid expenses and other assets

Accounts payable

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Unearned revenue

Accrued interest

lease right-of-use asset

cash used in operating activities

( 7,264,795 )

Operating lease right-of-use asset

Net cash used in operating activities

( 9,328,842 )

Cash flows from investing

Purchase of property

and equipment

net of cash acquired

( 7,264,795 )

cash used in investing activities

Cash flows from investing activities

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issuance of Common Stock from direct offering

Proceeds from exercised stock options

Proceeds from exercise of warrants

Proceeds from issuance of Convertible Preferred Stock

Payment of offering costs for financing activities

( 1,771,939 )

Cash flows from financing

Proceeds from issuance

of common stock from direct offering, net of underwriting discounts, commissions, and offering expenses of $ 1,334,811

Proceeds from exercised

stock options

Proceeds from exercise

Payment on loans payable

Proceeds from loans

repayments on finance leases

Net cash provided by (used in) by financing activities

Net decrease in cash and cash equivalents

( 1,261,898 )

(Payments) proceeds from loans payable

Principal repayments on finance leases

Net cash provided by financing activities

Net change in cash and cash equivalents

( 1,716,279 )

Cash and cash equivalents

at beginning of year

and cash equivalents at end of year

Supplemental disclosures

of cash flow information:

Income taxes paid in

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental disclosures of cash flow information:

Income taxes paid in cash

Interest paid

Noncash investing activities:

Stock issuance in connection

with the acquisition

Noncash financing activities:

Fair value of warrants

issued to placement agents

Fair value of warrants issued to placement agents

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

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BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

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, 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 also conducted and intends to seek strategic partners to advance therapeutic discoveries that could

in the future result in broad-spectrum cancer treatments.

Research and optimization of the Company’s proprietary platform technologies

are conducted in laboratories at PPLS and laboratory space leased at The University of Texas at San Antonio.

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.

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.

Company was formed on March 26, 2014, as a Delaware corporation with its corporate offices located in San Antonio, Texas.

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Securities and Exchange Commission (“SEC”).

and Capital Resources

share and per-share amounts in the accompanying footnotes have been retroactively adjusted to reflect the Company’s 1-for-30 reverse

Going Concern

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

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ability to continue as a going concern for at least one year after the date the consolidated financial statements are issued.

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

and negative cash flows for the foreseeable future.

As a result, the Company had an accumulated deficit of $ 53.6 million at December

The Company’s cash and cash equivalents at December 31, 2024, were approximately $ 1.1 million.

Based on the Company’s

current expected level of operating expenditures and the cash and cash equivalents on hand at December 31, 2024, management concludes

that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve (12)

months subsequent to the issuance of the accompanying consolidated financial statements.

Without funding from the proceeds of a capital raise or strategic relationship

or grant, management anticipates that the Company’s cash resources are sufficient to continue operations through April 2025.

The Company may need to raise further

capital through the sale of additional equity or debt securities or other debt instruments, strategic relationships or grants, or other

arrangements to support its future operations, if 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 consolidated financial statements as a result of this uncertainty.

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 $ 68.6

million at December 31, 2025.

The Company’s cash and cash equivalents at December 31, 2025, were approximately $ 6.4

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

December 31, 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 consolidated financial

Without funding from the proceeds from the issuance of equity or debt securities, exercise of outstanding warrants,

funding from a potential strategic relationship or grants, management anticipates that the Company’s cash resources are

sufficient to continue operations through June 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.

No adjustments have been made to the presented consolidated financial statements as a result of this

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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.

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

September 18, 2023, the Company, in connection with the Asset Purchase Agreement it entered into with Village Oaks and Roby P.

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

total consideration of $ 3,500,000 , which consists of:

(1) $ 2.5 million in cash paid at closing and (2) 564,972 shares of the Company’s

Common Stock valued at $ 1 million.

The assets purchased included a clinical pathology laboratory regulated by the Centers for Medicare

and Medicaid Services (“CMS”) and accredited by the College of American Pathologists (“CAP”) and certified under

the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”).

The primary reason for the acquisition was control of the

laboratory in which CyPath ® Lung is ordered and processed.

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

The acquisition is being accounted for as a business combination

in accordance with ASC 805.

The Company has determined the fair values of the accounts receivable, accounts payable, and accrued expenses

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

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

OF PURCHASE PRICE AND FINALIZED PURCHASE PRICE ALLOCATIONS

purchase consideration

Net working capital (including

Property and equipment

Customer relationships

Trade names and trademarks

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

The calculated goodwill is not deductible for tax

Company incurred and expensed approximately $ 811,000

in acquisition costs.

and Cash Equivalents

the purpose of the consolidated 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.

the purpose of the consolidated statements 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

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Dilutive Common Stock equivalents

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

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

using the treasury stock method.

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as of December 31, 2025 and 2024, as they would be anti-dilutive:

OF POTENTIALLY DILUTIVE SECURITIES

of December 31,

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

As of December 31,

Shares underlying options outstanding

Shares underlying convertible preferred stock

Shares underlying warrants outstanding

Shares underlying unvested

restricted stock outstanding

Anti-dilutive

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

Shares underlying unvested restricted stock

Anti-dilutive securities

determine revenue recognition for the arrangements that the Company determines are within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts

with Customers , the Company performs the following five steps:

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Post-acquisition

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

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

PPLS generates three sources of revenue:

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.

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.

Company follows a standard process, which considers historical denial and collection experience and other factors (including the period

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involves significant judgment and estimation.

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

(1) royalties from

the Company’s diagnostic test, CyPath ® Lung, (2) clinical flow cytometry services provided to Village Oaks related

to the Company’s CyPath ® Lung test, and (3) CyPath ® Lung tests purchased by the U.S.

Department of

Defense (“DOD”) for an observational study, “Detection of Abnormal Respiratory Cell Populations in Lung Cancer Screening

Patients Using the CyPath ® Lung Assay (NCT05870592),” and research and development on using bronchoalveolar lavage

fluid as a biological sample to assess cardiopulmonary function and exercise performance in military personnel post COVID-19 infection.

The royalty income from CyPath ® Lung and clinical flow cytometry services income, beginning September 19, 2023, are related

party income and, therefore, eliminated from consolidated net revenues.

OF REVENUE RECOGNITION

Patient service

SCHEDULE OF REVENUE RECOGNITION

service fees 1

Histology service fees

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Other revenues

services fees include direct billing for CyPath® Lung diagnostic test of approximately $ 516,000 and $ 35,000 for the years

ended December 31, 2024 and 2023.

Total net revenue

services fees include direct billing for CyPath® Lung diagnostic test of approximately $ 963,000 and $ 516,000 for the years ended

December 31, 2025 and 2024.

Reclassifications

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

Any reclassifications had an immaterial effect

on the Company’s consolidated financial statements and had no effect on prior periods net loss or stockholders’

Accounts and other receivables, net

Substantially all accounts receivable are due from

insurance companies, U.S.

and state governmental agencies, and patients.

The Company believes credit risks are mitigated as a result of

the large number customers.

The portion of the Company’s accounts receivable due from patients comprises the largest portion of

credit risk, assumptions and judgments are used to assess collectability from patients.

and Equipment, Net

accordance with ASC 360-10, Accounting for the Impairment of Long-Lived

Assets ( “ASC 360” ) , 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 years ended December 31,

2024 or 2023.

accordance with ASC 360-10, Accounting for the Impairment of Long-Lived Assets ( “ASC 360” ) , 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 years ended December 31, 2025 or 2024.

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

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lives of each asset class are as follows:

OF PROPERTY AND EQUIPMENT USEFUL LIFE

SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE

of lease term or useful life

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their respective useful lives are as follows:

trade names and trademarks ( 18

years) and customer relationships ( 14

Intangible assets, net of accumulated

amortization, are summarized as follows as of December 31, 2024 and 2023:

OF INTANGIBLE ASSETS

trade names and trademarks ( 18 years) and customer relationships ( 14 years).

assets, net of accumulated amortization, are summarized as follows as of December 31, 2025 and 2024:

SCHEDULE OF INTANGIBLE ASSETS

Trade names and trademarks

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Intangible assets, net

the year ended December 31, 2024, amortization of intangible assets totaled $ 58,333 compared to $ 16,528 in the prior year comparative

Goodwill is reviewed annually for impairment in accordance with ASC

350 - Intangibles – Goodwill and Other , and intangible assets are reviewed annually for impairment in accordance with ASC 360

unless circumstances dictate the need for more frequent assessment.

The Company elected to perform a quantitative impairment analysis

as of December 31, 2024.

The annual quantitative assessment of the intangible assets was performed utilizing a discounted cash flow analysis

(“income approach”) .

The income approach measures the fair value of an interest

in a business by discounting expected future cash flows to present value.

The results of the annual quantitative impairment analysis indicated

that the fair value exceeded the carrying value of the reporting unit and therefore resulted in no impairment needed.

the years ended December 31, 2025 and 2024, amortization of intangible assets totaled $ 58,334 .

is reviewed annually for impairment in accordance with ASC 350, Intangibles – Goodwill and Other , and intangible assets are

reviewed annually for impairment in accordance with ASC 360 unless circumstances dictate the need for more frequent assessment.

elected to perform a quantitative impairment analysis as of December 31, 2025.

The annual quantitative assessment of the intangible assets

was performed utilizing a discounted cash flow analysis (“income approach”) .

income approach measures the fair value of an interest in a business by discounting expected future cash flows to present value.

results of the annual quantitative impairment analysis indicated that the fair value exceeded the carrying value of the reporting unit

and therefore resulted in no impairment needed.

estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as

of December 31, 2025 is as follows:

SCHEDULE OF ESTIMATED AMORTIZATION

OF INTANGIBLE ASSETS

Year Ending December 31,

Accounting Pronouncements

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

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

financial statements.

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

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable

Segment Disclosures on December 31, 2024, on a retrospective basis.

The Company used the five steps to ASC 280 to evaluate what, if any, segment reporting

would be beneficial for shareholders.

These five steps included:

1) evaluate operating segments for aggregation, 2) perform quantitative

threshold tests, 3) evaluate remaining operating segments for aggregation, 4) ensure that 75% of revenue is reported, and 5) consider

practical limit.

Based on the analysis above against those five steps, management concludes that segment reporting is required for two

segment operations:

1) diagnostic R&D and 2) laboratory services (See Note 2).

The FASB issued Accounting Standards Update (“ASU”)

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

consolidated financial statements.

Company adopted FASB issued ASU No.

ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures which requires public business entities

to disclose annually a tabular rate reconciliation, including specific items such as state and local income tax, tax credits, nontaxable

or nondeductible items, among others, and a separate disclosure requiring disaggregation of reconciling items as described above which

equal or exceed 5% of the product of multiplying income from continuing operations by the applicable statutory income tax rate.

is effective for all public business entities for annual periods beginning after December 15, 2024.

The adoption of this standard

is not expected to have a material effect on the Company’s operating results or financial condition.

Improvement to Income Tax Disclosures.

requires enhanced annual disclosures, including:

(i) disaggregated information in the rate reconciliation, (ii) disaggregation of income

(loss) from continuing operations before income tax expense (benefit) between domestic and foreign, (iii) disaggregation of income tax

expense (benefit) from continuing operations by federal, state, and foreign, and (iv) disaggregated disclosure of income taxes paid by

jurisdiction.

The Company adopted ASU 2023-09 on January 1, 2025 prospectively.

The adoption of ASU 2023-09 resulted in expanded

income tax disclosures in Note 15.

Income Taxes.

taxes are accounted for under the asset and liability method.

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31, 2025 and 2024, and the Company had no accruals for interest and penalties at December 31, 2025 or 2024.

The Company is organized in two operating segments, Diagnostic Research and

Development (“R&D”) and Laboratory Services, whereby its chief operating decision maker (“CODM”) uses operating

income as the primary measure of segment profit or loss to assess performance and make resource allocation decisions, in addition to monitoring

revenue growth and research and development progress.

Company is organized in two operating segments, Diagnostic Research and Development (“R&D”) and Laboratory Services,

whereby its chief operating decision maker (“CODM”) uses operating income as the primary measure of segment profit or loss

to assess performance and make resource allocation decisions, in addition to monitoring revenue growth and research and development progress.

The CODM is the Chief Executive Officer.

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OF SEGMENT INFORMATION

of December 31,

As of December 31,

Net revenues:

Diagnostic R&D

Laboratory services

Total net revenues

Operating expenses:

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( 9,946,452 )

corporate activities

General corporate activities

( 7,693,314 )

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( 8,953,445 )

Non-operating

income (expense), net

Non-operating expense, net

( 4,293,204 )

Net loss before income taxes

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( 9,028,181 )

Income tax expense

$ ( 14,909,754 )

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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 consolidated

balance sheets and within research and development expense in the accompanying consolidated statements of operations.

amount of services provided but not yet invoiced and includes these costs in accrued expenses in the accompanying consolidated balance

sheets and within research and development expense in the accompanying consolidated statements of operations.

Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established

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Other receivables

accounts and other receivables, net

Total accounts and other receivables, net

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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Legal and professional

prepaid expenses and other current assets

Total prepaid expenses and other current assets

PROPERTY AND EQUIPMENT, NET

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and equipment, gross

accumulated depreciation

and amortization

property and equipment, net

accumulated depreciation and amortization

Total property and equipment, net

property and equipment depreciation and amortization expense was $ 170,359 and $ 162,332 for the years ended December 31, 2025 and 2024,

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Legal and professional

accrued expenses

Total accrued expenses

UNEARNED REVENUE

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

A total of 70 CyPath ® Lung units

were ordered and shipped.

However, in compliance with FASB ASC 606, the performance obligation was complete for only 40 units as of December

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

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 41 units

as of December 31, 2025.

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

revenue balance amounted to $ 24,404 and $ 33,058 as of December 31, 2024 and 2023, respectively.

The unearned revenue balance amounted to $ 23,827 and $ 24,404 as of December 31, 2025 and 2024, respectively.

August 2025, the Company engaged with Veterans Administration (“VA”) medical centers to purchase CyPath ®

A total of 30 tests were ordered and shipped.

However, in compliance with FASB ASC 606, the performance obligation

was complete for only eight tests as of December 31, 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 $ 18,578 as of December 31, 2025.

FAIR VALUE MEASUREMENTS

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three levels of the hierarchy and the related inputs are as follows:

Unadjusted quoted prices in active markets for identical assets and liabilities.

quoted prices in active markets for identical assets and liabilities;

quoted prices in active markets for similar assets and liabilities.

Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active;

Inputs other than quoted prices that are observable for the asset or liability.

Unobservable inputs for the asset or liability.

quoted prices for identical or similar assets or liabilities in markets that are not active;

other than quoted prices that are observable for the asset or liability.

inputs for the asset or liability.

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

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

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.

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 consolidated statements of operations.

were no warrant liabilities as of December 31, 2025 and 2024.

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 for the change in fair value of warrants issued before adjusting the warrant liability to equity classified warrants.

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.

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 3.1 to 5.9 years as of December 31, 2024.

The Company has finance leases consisting of office and lab equipment

with remaining lease terms ranging from approximately 1.25 to 3.0 years as of December 31, 2024, for which the Company has determined

that it will use the equipment for a major part of its remaining economic life.

On April 1, 2025, the Company terminated one

of the finance leases and entered into a new finance lease agreement for equipment on October 20, 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 1.6 to 4.7 years as of December 31, 2025.

The Company has finance leases consisting of

lab equipment with remaining lease terms ranging from approximately 0.3 to 6.8 years as of December 31, 2025, for which the Company has

determined that it will use the equipment for a major part of its remaining economic life.

lease agreements generally do not provide an implicit borrowing rate.

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to 8.07 % for the lease term lengths.

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

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

There are no material residual guarantees associated

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

the year ended December 31, 2024, and 2023 are as follows:

the years ended December 31, 2025 and 2024 are as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

of lease expense:

Amortization of right-of-use assets

- finance lease

Components of lease expense:

Amortization of right-of-use assets - finance lease

Interest on lease liabilities - finance lease

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Total lease cost

Cash paid for amounts included in the measurement

of lease liabilities:

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from finance leases

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SCHEDULE OF BALANCE SHEET INFORMATION RELATING TO LEASES

lease right-of-use, assets

Operating leases:

Operating lease right-of-use assets

Operating lease liability, current

Operating lease liability,

Total operating lease

Financing lease right-of-use assets,

Operating lease liability, non-current

Total operating lease liabilities

Financing leases:

Financing lease right-of-use assets, gross

Accumulated amortization

Finance lease right-of-use

Finance lease right-of-use assets, net

Financing lease liability, current

Financing lease liability,

Total finance lease

Weighted-average

remaining lease term:

Financing lease liability, non-current

Total finance lease liabilities

Weighted-average remaining lease term:

Operating leases (in years)

Finance leases (in years)

Weighted-average

discount rate:

Weighted-average discount rate:

Operating leases

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and thereafter

Total undiscounted cash flows

Less discounting

Present value of lease

undiscounted cash flows

value of lease liabilities

NOTES PAYABLE

Corolla - 2024

Notes Payable

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 December 31, 2025, was $ 29,774 .

current portion of the balance of this loan as of December 31, 2025 was $ 4,588 .

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

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This loan is collateralized by the underlying vehicle.

The balance of this loan as of December 31, 2024, and 2023 was $ 24,849 and $ 0 , respectively.

The current portion of the balance of this loan as of December 31, 2024, and 2023

was $ 5,603 and $ 0 , respectively.

The balance of this loan as of December 31, 2025 and 2024, was $ 20,618

and $ 24,849 , respectively.

The current portion of the balance of this loan as of December 31, 2025 and 2024, was $ 4,491 and $ 5,603 ,

respectively.

and Officers Insurance Policy – 2025

September 2024, the Company obtained short-term financing of approximately $ 0.26 million with 11 monthly payments of approximately $ 24,000

September 2025, the Company obtained short-term financing of approximately $ 127,500 with 10 monthly payments of approximately $ 13,000

and interest at a 6.70 % fixed annual rate for director and officer insurance policies.

The current portion of the balance of this loan

as of December 31, 2024, and December 31, 2023, was $ 167,000 and $ 0 , respectively.

The current portion of the balance of the Company’s

Directors and Insurance short-term financing as of December 31, 2025, was $ 90,002 and $ 167,000 as of December 31, 2024, for the 2024

Directors and Officers Insurance Policy.

In 2024, the Company financed the director and officer insurance policy.

COMMITMENTS AND CONTINGENCIES

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the Company has no material pending legal proceedings.

CONVERTIBLE PREFERRED AND COMMON STOCK

Convertible Preferred Stock

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

The Company has issued 700 shares

of preferred stock, designated as Series B.

In August 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

per share of Common Stock.

The investors have converted 290

Series B Convertible Preferred Stock in exchange for 42,028

shares of Common Stock as of December 31, 2025.

of the Series B preferred stock have various rights as follows:

Voting Rights.

Except as otherwise required by

law, holders of Series B Preferred Stock shall not be entitled to any voting rights.

The holders of Series B Preferred

Stock shall be entitled to receive dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-Common-Stock basis)

to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of

the Common Stock.

The Series B Preferred Stock will

be convertible into shares of Common Stock at an initial conversion price of $ 0.23 per share (the “Conversion Price”).

share of Series B Preferred Stock shall be convertible into such number of shares of Common Stock that results from dividing the Stated

Value by the Conversion Price.

Holders of Series B Preferred Stock are prohibited from converting shares of Series B Preferred Stock into

shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own in excess

of 4.99% of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

whenever on or after the date on which the Company obtains the Preferred Stockholder Approval, the Company is deemed to have issued or

sold any shares of Common Stock for a consideration per share less than the Conversion Price, the Conversion Price will be reduced to

such new issuance price subject to a floor price of $ 0.10 per share.

Company has authorized a total of 350,000,000 shares of Common Stock, $ 0.007 par value per share.

On June 4, 2024, the Company received

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

June 5, 2024, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware

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.

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as of December 31, 2025, and 519,158 shares of Common Stock, of which 11,638 are unvested restricted stock awards as of December 31,

2024, adjusted for the 30-1 reverse stock split.

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.

In October 2025, we entered into definitive agreements

for the purchase and sale of 720,000 shares of Common Stock, at a purchase price of $ 2.50 per share in a registered direct offering priced

at-the-market under Nasdaq rules.

The gross proceeds from the offering were approximately $ 1.8 million before deducting placement agent

fees and other offering expenses payable by us.

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 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 .

Agreement provides that WallachBeth will receive 3.0 % of the gross sales price sold under the ATM Agreement.

From May 22, 2025, through

December 31, 2025, the Company sold 114,672 shares of Common Stock through the ATM Agreement which accumulated approximately $ 1.2 million

in gross proceeds.

STOCK-BASED COMPENSATION

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

Under the 2014

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

On June 6, 2023, the

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

Options or restricted

stock awards may be granted to employees, the Company’s board of directors, and external consultants who provide services to the

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 according to the respective 10-year

term of the 2014 Plan 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’s 2014 Equity Incentive Plan (the “2014 Plan”), the Company is authorized to grant options or restricted

stock for up to 66,666

shares of Common Stock.

On June 6, 2023, the Company received

stockholder approval to increase the number of authorized shares from 38,095

adjusted for the 30-1 reverse split.

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.

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.

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:

in the accompanying consolidated statements of operations:

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

Research and development

Selling, general and

administrative

stock-based compensation expense

Selling, general and administrative

Total stock-based compensation expense

following table summarizes stock option activity under the 2014 and 2024 Plans:

SUMMARY OF OPTION ACTIVITY

Weighted-average

exercise price

Weighted-average

remaining contractual

term (in years)

intrinsic value

Outstanding at December 31, 2024

Outstanding at December 31, 2025

Vested and exercisable

at December 31, 2024

Vested and exercisable at December 31, 2025

of December 31, 2025, there was no unrecognized compensation cost related to non-vested stock options.

During the year ended December 31, 2024, 208,031 options were exercised at an exercise price of $ 1.155 , of which 143,183 options were from a cashless exercise, and 137,854 options were forfeited due to a cashless exercise.

following table summarizes restricted stock award activity under the 2014 and 2024 Plan:

3 unchanged sentences

Balance at December 31, 2025

the year ended December 31, 2024, the Company issued restricted stock awards (“RSAs”) for 865,423 shares of Common Stock to employees,

non-employees, and the Board of Directors.

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

the year ended December 31, 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 year ended December

31, 2024, 31,973 shares vested from RSAs granted prior to January 1, 2024, and 517,943 shares vested from RSAs granted during the year

During the year

ended December 31, 2025, 7,195

the year ended December 31, 2023, the Company issued RSAs for 431,028 shares of Common Stock to employees and non-employees.

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

continuous service through the vesting date.

During the year ended December 31, 2023, 59,051 shares vested from RSAs previously issued.

shares vested from RSAs granted in 2025, and 7,621

shares vested from RSA’s granted prior to 2025.

Company’s outstanding Common Stock warrants are equity classified.

As of December 31, 2024 and 2023, the Company

had 12,298,124

and 4,649,952

warrants outstanding, respectively, to purchase one share of the Company’s Common Stock for each warrant at a weighted average exercise price

and expire at various dates through October 2029.

As of December 31, 2025 and 2024, the Company had 1,348,494

warrants outstanding to purchase one share of the Company’s Common Stock for each warrant at a weighted average price of

These warrants expire at various dates through August 2030.

During the year ended December 31, 2025, a total number of 1,204,854

warrants were exercised into an equivalent number of shares of Common Stock as compared to no

warrants being exercised during the year ended December 31, 2023.

The proceeds of the exercised warrants for the year ended December

31, 2024, was $ 1,343,390 ,

compared to no

proceeds during the year ended December 31, 2023.

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

Common Stock and (2) in a concurrent private placement, warrants to purchase an aggregate of 1,600,000 shares of Common Stock,

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

under the terms of the warrants.

In addition, the placement agent was granted warrants to purchase 32,000 shares of Common

Stock, with an exercise price of $ 1.64 .

August 5, 2024, the Company entered into warrant exercise agreements with three existing accredited investors to exercise certain outstanding

warrants to purchase an aggregate of 1,041,667 of the Company’s shares of Common Stock (the “Existing Warrants”).

exercising holders received in a private placement new unregistered warrants (the “New Warrants”) to purchase up to an aggregate

of 1,302,082 shares of Common Stock with an exercise price of $ 1.50 per share, which are initially exercisable on the date that stockholder

approval of the exercise of the New Warrants is obtained and will expire five years from the date of such approval.

In connection with

the exercise of the Existing Warrants, the Company agreed to reduce the exercise price of the Existing Warrants from $ 1.64 to $ 1.25 per

The exercise of the Existing Warrants and the issuance of the New Warrants occurred on August 5, 2024.

The change in the exercise price of the Existing Warrants resulted in a fair value adjustment of $ 27,757 which

was recorded to Additional paid-in capital for the exercised warrants.

August 5, 2024, the Company also entered into a securities purchase agreement with an institutional

investor (the “Purchaser”), pursuant to which the Company issued to the Purchaser, (1) in a registered direct offering, 360,000

shares of Common Stock, and (2) in a concurrent private placement, warrants (the “Private Warrants”) to purchase an aggregate

of 450,000 shares of Common Stock (the “Private Warrant Shares”), with an exercise price of $ 1.50 (collectively, the “Offering”).

In addition, designees of the placement agent for the Offering were granted warrants to purchase an aggregate of up to 49,862 shares

of Common Stock, with an exercise price of $ 1.50 .

October 21, 2024, the Company issued (1) in a registered direct offering, 2,048,294 shares (the “Shares”) of the Company’s Common Stock, par value $ 0.007 per share, and (2) in a concurrent private placement, common warrants

(the “Common Warrants”) to purchase an aggregate of 2,662,782 shares of Common Stock (the “Common Warrant

Shares”), with an exercise price of $ 1.50 , pursuant to a securities purchase agreement, dated October 18, 2024 with institutional investors (the “Purchasers”).

Such registered direct offering and concurrent private

placement are collectively referred to as the “Offerings.” In addition, designees of the placement agent for the Offering

were granted warrants to purchase an aggregate of up to 61,448 shares of Common Stock, with an exercise price of $ 1.50 .

of December 31, 2024, and prior to the Offering, there were tradeable warrants to purchase up to an aggregate of 1,601,255 shares of

Common Stock outstanding and non-tradeable warrants to purchase an aggregate of up to 2,704,458 shares of Common Stock outstanding.

warrants were exercised into 1,140,947 shares of Common Stock as compared to 35,558

being exercised during the year ended December 31, 2024.

During the year ended December 31, 2025, a total of 63,907

warrants were forfeited as a result of cashless exercises.

The proceeds from the exercise of warrants for the year ended December

31, 2025, was approximately $ 4.8

million, compared to proceeds of $ 1.3

million for the year ended December 31, 2024.

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

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 .

May 7, 2025, the Company completed a public offering with warrants (“May 2025 Warrants”) to purchase of 507,812

shares of Common Stock.

The May 2025 were initially recorded as liability classified until certain requirements were met, at which

time the May 2025 warrants were reclassified as equity.

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 receiving shareholder approval.

number of shares of Common Stock issuable upon exercise of the May 2025 Warrant Shares is subject to the following adjustments:

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”).

the adjustments, the Company issued a total of 962,862

additional warrants related to the May 2025 Warrants at an exercise price of $ 4.50 .

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.

stockholder approval, the warrants have a term of five years.

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.

of December 31, 2025, there were tradeable warrants to purchase up to an aggregate of 53,375 shares of Common Stock outstanding and non-tradeable

warrants to purchase an aggregate of up to 90,149 shares of Common Stock outstanding.

SCHEDULE OF CLASS OF WARRANT

warrants issued

Weighted-average

exercise price

5 unchanged sentences

Direct offering March 8, 2024

( 1,066,667 )

Placement agent direct offering March 8, 2024

2 unchanged sentences

Direct offering October 21, 2024

Placement agent direct

offering October 21, 2024

Warrant inducement February 25, 2025

Public offering May 7, 2025

PIPE/Inducement offering August 13, 2025

Balance at December 31, 2025

( 2,103,253 )

Company’s net loss before income taxes of $ 14.9 million and $ 9.0 million consisted entirely from U.S.

operations for the years

ended December 31, 2025 and 2024, respectively.

The components of income tax expense and taxes paid by jurisdiction for the years ended December 31, 2025 and 2024 were as

SCHEDULE OF INCOME TAX EXPENSE AND TAXES PAID BY JURISDICTION

State and local (1)

For the year ended December 31, 2025, state and local taxes, net of federal benefit, were attributable to Texas and Delaware.

tax assets and valuation allowance

Company had, subject to limitation, approximately $ 31 million of net operating loss carryforwards at December 31, 2024, of which approximately

$ 0.67 million will begin expiring in 2034.

The remaining balance of approximately $ 30 million will carry forward indefinitely.

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

earnings history.

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

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

The ultimate realization of deferred tax assets is dependent upon

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

The valuation allowance

increased by approximately $ 2.0 million and $ 3.0 million for the years ended December 31, 2024 and 2023, respectively.

Significant components

of deferred tax assets are as follows:

The tax effect of significant items comprising deferred tax assets are as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets:

Net operating

loss carryover

Net operating loss carryover

Stock compensation

Capitalized R&E

Capitalized R&E costs

Bad debt expense

2 unchanged sentences

Deferred tax liability:

Right-of-use asset tax

Right-of-use asset tax liability

$ ( 145,862 )

and amortization

$ ( 261,215 )

Depreciation and amortization

Total deferred tax liability

3 unchanged sentences

tax assets (liabilities), net

The Company is required to reduce its deferred tax assets by a valuation allowance if it is more likely than not that some or all of its

deferred tax assets will not be realized.

Management must use judgment in assessing the potential need for a valuation allowance, which

requires an evaluation of both negative and positive evidence.

The weight given to the potential effect of negative and positive evidence

should be commensurate with the extent to which it can be objectively verified.

In determining the need for and amount of the valuation

allowance, if any, the Company assesses the likelihood that it will be able to recover its deferred tax assets using historical levels

of income, estimates of future income and tax planning strategies.

As a result of historical cumulative losses, the Company determined

that, based on all available evidence, there was substantial uncertainty as to whether it will recover recorded net deferred taxes in

future periods.

Accordingly, the Company recorded a valuation allowance against all of its net deferred tax assets as of December 31,

2025 and 2024.

The net change in total valuation allowance was an increase of approximately $ 1.9 million and $ 2.0 million for the years

ended December 31, 2025 and 2024, respectively.

reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2025

4 unchanged sentences

Research and development credits

Deferred balance true-up

Change in valuation

income tax rate

of December 31, 2024, and 2023, the Company has unrecognized tax benefits related to tax credits of $ 281,207 and $ 249,516 , respectively.

None of the unrecognized tax benefits as of December 31, 2024, if recognized, would impact the effective tax rate due to the valuation

Deferred true-up

Change in valuation allowance

Effective income tax rate

of December 31, 2025 and 2024, the Company has unrecognized tax benefits related to tax credits of $ 0.3 million and $ 0.3 million,

respectively.

of the unrecognized tax benefits as of December 31, 2025, if recognized, would impact the effective tax rate due to the valuation

allowance, and no interest or penalties have been recognized.

A reconciliation of the beginning and ending balance of unrecognized tax

benefits is as follows:

A reconciliation of the beginning and ending balance of unrecognized

tax benefits is as follows:

OF UNRECOGNIZED TAX BENEFITS

Beginning balance

Deductions based on tax positions related

to the prior year

Additions based on

tax positions related to the current year

Deductions based on tax positions related to the prior year

Additions based on tax positions related to the current year

Ending balance

SUBSEQUENT EVENTS

March 7, 2025, the Company announced targeted strategic actions to improve financial performance and accelerate the commercial

growth of CyPath ® Lung, taking steps to deliver approximately $ 4 million in annual cost savings at its subsidiary

Precision Pathology Laboratory Services (PPLS), while increasing resources to expand CyPath ® Lung sales in

high-potential national markets.

Specifically, cost savings are a result of labor cost reductions, operational efficiency

enhancements, and discontinuing certain pathology services with suboptimal profit margins to focus on high-margin services such as

CyPath ® Lung and by discontinuing certain pathology services with suboptimal profit margins.

February 26, 2025, pursuant to the terms of a warrant inducement agreement (the “February Inducement Agreement”), dated

February 25, 2025 that the Company entered into with certain holders of existing warrants, such holders exercised for cash (i)

warrants to purchase an aggregate of up to 1,302,082

shares of Common Stock issued on October 21, 2024 (the “October Warrants”), at the reduced exercise price of $ 0.58

per share, and (ii) warrants to purchase an aggregate of up to 1,136,391

shares of Common Stock issued on August 5, 2024 (the “August Warrants”), at the reduced exercise price of $ 0.58

The Company received aggregate gross proceeds of approximately $ 1.4

million, before deducting advisory fees and other expenses payable by it.

In consideration of the immediate exercise of the October

Warrants and August Warrants by the holders thereof in accordance with the February Inducement Agreement, the Company issued unregistered

common warrants to purchase an aggregate of up to 2,926,166

shares of Common Stock ( 120 %

of the number of shares of Common Stock issuable upon exercise of the October Warrants and August Warrants) to such

Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

During the years ended December 31, 2025 and 2024, the Company recognized no interest and penalties associated with unrecognized tax

There are no tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly

increase or decrease within twelve months of the reporting date.

the tax statute of limitations applicable to the Internal Revenue Code, the Company and its U.S.

subsidiary, either standalone or as

part of the consolidated group, is no longer subject to U.S.

federal income tax examinations by the Internal Revenue Service for tax

years before tax year 2021.

However, because the Company is carrying forward income tax attributes, such as net operating losses and

tax credits from 2020 and earlier tax years, these attributes can still be audited when utilized on returns filed in the future.

of December 31, 2025 and 2024, the Company had net operating loss (“NOL”) carryforwards of $ 47.2 million and $ 38.0 million

for federal purposes, respectively.

If not utilized, federal net operating losses of $ 6.0 million will begin to expire in 2034 and $ 41.2

million will be carried forward indefinitely.

of December 31, 2025 and 2024, the Company had research and development tax credit carryforwards for federal purposes of $ 0.5 million

and $ 0.7 million, respectively.

The federal research and development tax credit carryforwards will expire at various dates between 2037

382 and 383 of the Internal Revenue Code provide for a limitation on the annual use of NOL and tax credit carryforwards following certain

ownership changes that could limit the Company’s ability to utilize these carryforwards.

The Company continues to disclose the

NOL and tax credit carryforwards at their original amount in the table above as no potential limitation has been quantified.

has also established a full valuation allowance for all deferred tax assets, including the NOL and tax credit carryforwards, since the

Company could not conclude that it was more likely than not able to generate future taxable income to realize these assets.

existence of a full valuation allowance, limitations under Section 382 and 383 will not impact the Company’s effective tax rate.

Further analyses will be performed prior to recognizing the benefits of any losses or credits in the consolidated financial statements.

on January 1, 2022, the Tax Cuts and Jobs Act (“the Act”), enacted in December 2017, eliminated the option to deduct research

and experimentation expenditures in the current period and requires taxpayers to capitalize and amortize U.S.-based and non-U.S.

research and experimentation expenditures over five and fifteen years, respectively.

However, the enactment of the bipartisan OBBB Act,

signed into law in July 2025, repeals the mandatory capitalization requirement for domestic R&D expenditures for tax years beginning

after December 31, 2024.

The Company has elected to continue to capitalize research and experimentation expenditures.

This legislation

does not impact the Company's current tax obligations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures