What changed in this filing

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Item 1. Business

2025-03-31 compared with 2024-04-01 · 519 added, 578 removed, 710 unchanged (61% of the section changed)

Technologies, Inc.

(the “Company,” “bioAffinity,” “we,” or “our”) develops noninvasive

diagnostics to detect early-stage lung cancer and other diseases of the lung.

We are advancing research into our therapeutic discoveries

which could result in broad-spectrum cancer treatments in the future.

We develop proprietary noninvasive diagnostic tests using flow

cytometry and automated analysis developed by artificial intelligence (“AI”).

Our diagnostic tests analyze cell populations,

including cancer and cancer-related cells, that are indicative of a specific diseased state.

were formed as a Delaware corporation on March 26, 2014.

On June 15, 2016, we formed OncoSelect ® Therapeutics, LLC (“OncoSelect ® ”) ,

a Delaware limited liability company and our wholly owned subsidiary which is a preclinical-stage biopharmaceutical discovery company

with a focus on therapeutics that deliver cytotoxic (cell-killing) effects on a broad selection of human cancers from diverse tissues

while having little or no effect on normal cells.

On August 14, 2023, we formed Precision Pathology Laboratory Services, LLC (“PPLS”),

a Texas limited liability company and our wholly owned subsidiary.

Research and optimization of our platform technologies for in vitro

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

We develop proprietary noninvasive diagnostics to detect early-stage lung

cancer and other diseases of the lung using flow cytometry and automated analysis developed by machine learning, a form of artificial

intelligence (“AI”).

Our diagnostic tests analyze cell populations, including cancer and cancer-related cells, that are indicative

of a specific diseased state.

We were formed as a Delaware corporation on March 26, 2014.

2016, we formed OncoSelect ® Therapeutics, LLC (“OncoSelect ® ”) , a Delaware limited liability

company and our wholly owned subsidiary which is a preclinical-stage biopharmaceutical discovery company that has advanced our discoveries

of novel potential cancer therapies that specifically and selectively target a broad spectrum of cancer cells that have been grown in

petri dishes without harm to healthy cells.

We expect to present our findings at conferences and publish the results of our research this

year and seek strategic partners that have the resources to advance our therapeutic discoveries.

August 14, 2023, we formed Precision Pathology Laboratory Services, LLC (“PPLS”), a Texas limited liability company and our

wholly owned subsidiary, which performs our clinical laboratory services, including CyPath ® Lung operations.

and optimization of our platform technologies for in vitro diagnostics and therapeutic technologies are conducted in laboratories at

The University of Texas at San Antonio and PPLS in San Antonio, Texas.

In September 2023, through our wholly owned subsidiary PPLS, we acquired

the assets of Village Oaks Pathology Services, P.A.

(“Village Oaks”), a Texas professional association d/b/a Precision Pathology

Services, including a clinical anatomic and clinical pathology laboratory and related services business in San Antonio, Texas.

The laboratory

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

of 1988 (“CLIA”).

first diagnostic test, CyPath ® Lung, addresses the need for noninvasive detection of early-stage lung cancer.

is the leading cause of cancer-related deaths worldwide.

Physicians order CyPath ® Lung to assist in their assessment of

patients who are at high risk for lung cancer.

The CyPath ® Lung test enables physicians to more confidently identify patients

who will likely benefit from timely intervention and more invasive follow-up procedures and those who are likely without lung cancer

and should continue routine screening.

CyPath ® Lung has the potential to increase overall diagnostic accuracy of lung

cancer, which could lead to increased survival, fewer unnecessary invasive procedures, reduced patient anxiety, and lower medical costs.

Physicians order CyPath ® Lung to assist in their assessment and

care of patients who are at high risk for lung cancer.

The CyPath ® Lung test enables physicians to more confidently identify

patients who will likely benefit from timely intervention and more invasive follow-up procedures and those who are likely without lung

cancer and should continue routine screening.

CyPath ® Lung has the potential to increase overall diagnostic accuracy of

lung cancer, which could lead to increased survival, fewer unnecessary invasive procedures, reduced patient anxiety, and lower medical

Lung uses flow cytometry technology to detect and analyze cell populations in a person’s sputum, or phlegm, to find characteristics

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any malignancy in the lungs and can provide information about its area of field cancerization and the lung microenvironment.

Lung uses automated data analysis developed by AI that allows an entire sample of sputum averaging 16 million cells to be examined

in approximately 30 minutes, allowing for cost-effective, large-scale commercialization.

Lung uses automated data analysis developed by machine learning, a form of AI, that allows data collection and analysis of an entire

sample of sputum in less than 30 minutes, allowing for cost-effective, large-scale commercialization.

conducted a 150-patient test validation trial of people at high risk for lung cancer including patients with the disease (N=28) and those

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identify a person without cancer, and 82% sensitivity, meaning the ability to correctly identify cancer in a person with the disease.

For the subset of patients in this trial who had lung nodules 20 millimeters (“mm”) or smaller, this trial resulted in 92%

sensitivity, 87% specificity, 99% negative predictive value, and 88% accuracy.

In this subset of 132 individuals with small nodules,

119 patients were cancer-free and 13 had confirmed lung cancer.

The detection of small lung nodules in people who have early-stage cancer

can increase lung cancer survival.

OncoSelect ® , our research has led to discoveries of novel potential cancer therapeutics that specifically and selectively

target cancer cells that have been grown in petri dishes.

September 2023, through our wholly owned subsidiary PPLS, we acquired the assets of Village Oaks Pathology Services, P.A.,(“Village

Oaks”) a Texas professional association d/b/a Precision Pathology Services, including a clinical anatomic and clinical pathology

laboratory and related services business in San Antonio, Texas.

The laboratory is accredited by the College of American Pathologists

(“CAP”) and certified under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”).

Direct Offering

March 6, 2024, we raised $2.5 million in gross proceeds from the sale to four institutional investors of (1) 1,600,000 shares of our

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

(2) warrants to purchase an aggregate of 1,600,000 shares of Common Stock (the “Common Warrants”) with an exercise price

of $1.64 in a concurrent private placement.

See “Management’s Discussion and Analysis of Financial Condition and Results

of Operations” for a more detailed discussion of this transaction.

Code Specific to CyPath ® Lung for Proprietary Laboratory Analyses

November 30, 2023, we announced that the Centers for Medicare and Medicaid Services (“CMS”) had made a final determination

for payment for CyPath ® Lung, our noninvasive test for early-stage lung cancer, for the 2024 calendar year.

January 1, 2024, CyPath ® Lung is on CMS’ 2024 clinical laboratory fee schedule.

The CPT Proprietary Laboratory Analyses

(“PLA”) code assigned to CyPath ® Lung is 0406U with the descriptor “Oncology (lung), flow cytometry,

sputum, 5 markers (meso-tetra [4- carboxyphenyl] porphyrin [TCPP], CD206, CD66b, CD3, CD19), algorithm reported as likelihood of lung

Lung Branding

2023, we developed a series of marketing tools based on branding for CyPath ® Lung that emphasize our test’s

ability to assist physicians with next steps in patient care.

In January 2024, we began using the new marketing materials with both physicians

and patients.

The branding concepts were developed by the marketing and advertising firms of Havas Health & You, Trinity Life Sciences,

and K2MD to build the CyPath ® Lung brand and position it for success in the cancer diagnostics sector.

Passes CAP Inspection

January 11, 2024, PPLS successfully passed its bi-annual CAP inspection necessary for continuing operations.

CAP accreditation ensures

that laboratories meet the highest standards of quality and patient care under the Clinical Laboratory Improvement Amendments (CLIA),

including personnel qualifications, equipment, facilities, safety protocols, and overall management and quality of testing.

Platt, Ph.D., Joins Board of Directors

December 2023, Jamie Platt, Ph.D., Managing Director and Chief Executive Officer of Pictor Limited, where she is leading a turnaround

by restructuring and accelerating product development, joined the bioAffinity Technologies Board of Directors.

Platt has more than

two decades of experience bringing novel diagnostic technologies to global markets.

She was instrumental in merger and acquisition exits

for two diagnostic companies with a combined value of approximately $1 billion.

She previously was Chief Operating Officer of Personal

Genome Diagnostics which was acquired by LabCorp for $575 million.

We believe Dr.

Platt’s scientific acumen, business leadership,

and board experience will contribute to the Company’s growth and successful commercialization of CyPath ® Lung.

Bansal, M.D., Joins Medical and Science Advisory Board

February 2024, Sandeep Bansal, M.D., Medical Director of Pennsylvania’s Lung Innovations Network, joined our Medical and Scientific

Advisory Board.

Bansal is Board certified in pulmonary disease, critical care medicine and interventional pulmonology and has also

served as principal investigator of multiple clinical research trials and peer reviewer for several medical journals.

Lung Innovations

Network, a patient-centered practice that offers comprehensive lung care to over 10,000 patients in central and western Pennsylvania,

incorporated CyPath ® Lung into its practice to aid in the detection of early-stage lung cancer in March 2024.

Bansal’s experience as both clinician and researcher is an important asset for bioAffinity Technologies.

CyPath ® Lung correctly detected 80% of Stage I lung cancers.

The test detected multiple lung cancer types including non-small

cell, small cell, adenocarcinoma, squamous, and large cell cancers.

For the subset of patients in this trial who had lung nodules 20

millimeters (“mm”) or smaller, this trial resulted in 92% sensitivity, 87% specificity, 99% negative predictive value, and

88% accuracy.

In this subset of 132 individuals with small nodules, 119 patients were cancer-free and 13 had confirmed lung cancer.

detection of small lung nodules in people who have early-stage cancer can increase lung cancer survival.

Year Financial Highlights

financial results for the year ended December 31, 2024 include:

revenue increased approximately 270% to $9.4 million as compared to $2.5 million for the year ended December 31, 2023, primarily as

a result of the acquisition of PPLS in September 2023.

CyPath ® Lung testing revenue increased approximately 1,400%

to $0.5 million as compared to $35 thousand for the year ended December 31, 2023, due to an increase in total test results delivered of

more than 600 for the current year.

approximately $6.9 million in gross proceeds from equity transactions to fund operating activities.

Pivotal Study

March 2025, we submitted our pivotal clinical trial protocol “Detection of Early-Stage Lung Cancer in Sputum using Flow

Cytometry and an Automated Analysis Pipeline” to the Sterling Institutional Review Board (“IRB”) for approval

after the Company meet met with the FDA on trial design.

In third quarter 2024, the National Association of Veterans Research and

Education Foundation (“NAVREF”) extended a “Call for Interest” to Veterans Administration (“VA”) systems to solicit participation in the

pivotal trial, which resulted in a positive response from 22 VA medical centers.

Academic, private, military, and VA centers currently are being qualified as collection sites for the

3,200-patient clinical trial expected to open in the second quarter of 2025.

March 2025, we announced the release of physicians’ case studies showing the benefit to patients and their doctors of using CyPath ®

Lung, including one case in which an “Unlikely Lung Cancer” directly prevented a robotic bronchoscopic biopsy or high-risk

percutaneous biopsy in a high-risk patient in response to imaging that showed several new, small non-calcified pulmonary nodules for

a high-risk patient.

In a second case study, a positive CyPath ® Lung test result led to diagnosis of a recurrence of breast

cancer, and a third case resulted in the diagnosis of a new primary lung cancer after a CyPath ® Lung positive test that

prompted a biopsy that otherwise would not have been performed.

Strategic Actions

March 2025, we announced targeted strategic actions to improve financial

performance and accelerate the commercial growth of CyPath ® Lung, taking steps to deliver approximately $4 million in annual

cost savings at our subsidiary PPLS, while increasing resources to expand CyPath® Lung sales in high-potential national markets.

Specifically,

cost savings are a result of labor cost reductions, operational efficiency enhancements, and discontinuing certain pathology services

with suboptimal profit margins to focus on high-margin services such as CyPath ® Lung and by discontinuing certain pathology

services with suboptimal profit margins.

of Department of Defense Research

the fourth quarter of 2023, we began selling CyPath ® Lung tests to the Department of Defense (DOD) to conduct an observational

study, “Detection of Abnormal Respiratory Cell Populations in Lung Cancer Screening Patients Using the CyPath ® Lung

Assay,” and for 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.

An additional research study was opened by Brooke Army

Medical Center in March 2023 to collect bronchoalveolar lavage samples to advance the research and development of a lung cancer test

to be used in conjunction with bronchoscopy to improve diagnostic accuracy with combined testing.

of Laboratory

September 18, 2023, PPLS consummated the acquisition of a clinical anatomic and clinical pathology laboratory and related services business

in San Antonio, Texas, pursuant to the terms of an Asset Purchase Agreement dated September 18, 2023, that we entered into with Village

Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, and Roby P.

PPLS is accredited

by the College of American Pathologists (“CAP”) and certified under the Clinical Laboratory Improvement Amendments of 1988

Founded in 2007 by Dr.

Joyce, the Medical Director and Laboratory Director of the clinical pathology laboratory

prior to and after the acquisition, has provided pathology services to physicians practicing in a variety of outpatient settings.

September 2021, Village Oaks, under the trade name Precision Pathology Services, has offered CyPath ® Lung for sale as

a laboratory developed test (“LDT”) for the detection of early-stage lung cancer.

In addition to CyPath ® Lung,

PPLS intends to continue to offer a range of laboratory services including respiratory testing for SARS-CoV-2 and influenza, anatomical

pathology, morphological stains, histological services, DNA extractions, STI testing, and women’s and men’s health testing.

to the terms of the Asset Purchase Agreement, PPLS acquired the laboratory assets, which included all of the assets owned by Village

Oaks other than medical assets, including the CLIA certification and CAP accreditation, which are assets Village Oaks used in connection

with its management and operation of a clinical pathology laboratory, now owned by PPLS, and related services business and assumed certain

liabilities and obligations.

Pursuant to the terms of the Asset Purchase Agreement, Village Oaks received $3,500,000 in consideration

for the assets to be purchased by PPLS, of which $1,000,000 was paid by the issuance of 564,972 shares of our restricted Common Stock

to a trust controlled by Dr.

Joyce which share number was determined by dividing $1,000,000 by $1.77, the average of the trading day

closing prices for the 30 days prior to September 15, 2023, rounded to the nearest whole share.

to the Asset Purchase Agreement, PPLS assumed all liabilities and obligations and obtained any and all rights, title and interest of

Village Oaks in and to (1) all leases for equipment and personal property related to the laboratory assets, pursuant to an Assumption

Agreement by and between Village Oaks and PPLS;

(2) certain other contracts related to the laboratory assets, including the license to

develop, manufacture, use, market, and sell CyPath ® Lung pursuant to the Assumption Agreement;

(3) all accounts payable

of Village Oaks as of September 18, 2023, that were incurred in the ordinary course of business consistent with past custom and practice;

and (4) the lease of the premises used in connection with operation of the CLIA-certified and CAP-accredited clinical pathology laboratory,

pursuant to an Assignment and Assumption of Lease by and between and PPLS.

connection with the Asset Purchase Agreement, PPLS entered into various other agreements, including a Management Services Agreement with

Village Oaks, a Succession Agreement with Village Oaks and Dr.

Joyce, and a Professional Services Agreement with Village Oaks pursuant

to which PPLS will provide comprehensive management and administrative services to Village Oaks in connection with the operation of its

professional cytopathology, histopathology, and clinical and anatomic pathology interpretation medical services practice.

PPLS will provide

space, equipment, administrative, management and clinical personnel, billing and collection, and related management services to Village

Oaks in exchange for a management fee of 70% of the net revenues received by Village Oaks from the provision of the medical services.

Succession Agreement provides that Dr.

Joyce, as holder of 100% of the issued and outstanding stock of Village Oaks, and Village Oaks

are restricted from disposing of their equity interests in Village Oaks, subject to certain exceptions, without the prior written consent

of us and Village Oaks.

to a Professional Services Agreement, Village Oaks provides pathology interpretation services as requested on behalf of PPLS based on

the professional fees approved for the CPT code for the services provided under the Medicare Physician Fee Schedule in the locality where

the test is performed.

connection with the Asset Purchase Agreement, we entered into an Executive Employment Agreement with Dr.

Joyce for a term of three years,

pursuant to which he serves as the Medical Director and Laboratory Director of PPLS, at a base salary of $333,333 per year.

to the Joyce Employment Agreement, Dr.

Joyce was also appointed to serve on our Board of Directors.

in the fourth quarter of 2023 and through 2024, we have been selling CyPath ® Lung tests to the Department of Defense (DOD)

to conduct an observational study, “Detection of Abnormal Respiratory Cell Populations in Lung Cancer Screening Patients Using

the CyPath ® Lung Assay,” and for 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.

and Private Offerings

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

February 25, 2025 that we 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 per share.

aggregate gross proceeds of approximately $1.4 million, before deducting advisory fees and other expenses payable by us.

consideration of the immediate exercise of the October Warrants and August Warrants by the holders thereof in accordance with the

February Inducement Agreement, we issued unregistered common warrants to purchase an aggregate of up to 2,926,166 shares of Common

Stock (120% of the number of shares of Common Stock issuable upon exercise of the October Warrants and August Warrants) to such

October 21, 2024, we issued to certain institutional investors (i) in a registered direct offering, 2,048,294 shares of our Common Stock,

and (ii) in a concurrent private placement, common warrants to purchase an aggregate of 2,662,782 shares of Common Stock, with an exercise

price of $1.50, pursuant to a securities purchase agreement, dated October 18, 2024, that we entered into with such institutional investors,

and received aggregate gross proceeds from the offerings of approximately $2.7 million, before deducting placement agent fees and other

offering expenses payable by us.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a more detailed discussion

of the foregoing transactions.

First Diagnostic Test – CyPath ® Lung

cancer remains the most commonly diagnosed cancer and the leading cause of cancer-related deaths worldwide.

Globally, there were an estimated

2.21 million lung cancer cases and 1.8 million lung cancer deaths in 2020, as reported by the World Health Organization in its 2020 Cancer

According to the American Lung Association (“ALA”), screening for individuals at high risk for lung cancer has

the potential to improve lung cancer survival rates by finding disease at an earlier stage when it is more likely to be curable.

published in the New England Journal of Medicine titled “Survival of patients with stage I lung cancer detected on CT screening”

dated October 26, 2006, reported that the survival rate of individuals with Stage I lung cancer who underwent surgical resection within

one month after diagnosis had a ten-year survival rate of 92%, as compared to the overall five-year survival rate in the U.S.

as reported by the ALA.

cancer remains the most commonly diagnosed cancer and the leading cause of cancer-related deaths worldwide, claiming more than 1.8 million

lives with almost 2.5 million new cases reported in 2022 according to a 2024 article in CA:

A Cancer Journal for Clinicians .

Epidemiology reports that lung cancer is the leading cause of cancer deaths in the European Union with an estimated 17 to 34 million

people at high risk.

China reported 1,060,600 new cases of lung cancer in 2022.

According to the American Lung Association (“ALA”),

screening for individuals at high risk for lung cancer has the potential to improve lung cancer survival rates by finding disease at

an earlier stage when it is more likely to be curable.

An estimated 19.3 million Americans should have annual screening for lung

cancer, according to American Cancer Society recommendations.

A study published in the New England Journal of Medicine titled

“Survival of patients with stage I lung cancer detected on CT screening” dated October 26, 2006, reported that the survival

rate of individuals with Stage I lung cancer who underwent surgical resection within one month after diagnosis had a ten-year survival

rate of 92%, as compared to the overall five-year survival rate in the U.S.

of 28.4% as reported by the ALA in its 2024 “State

of Lung Cancer” report.

Unfortunately, most lung cancer is detected in late stages.

The results of a large national clinical trial that

was reported in the New England Journal of Medicine in an article dated August 4, 2011, titled “Reduced Lung-Cancer Mortality

with Low-Dose Computed Tomographic Screening” showed that screening for lung cancer using low-dose computed tomography (“LDCT”)

resulted in a reduction of the mortality rate by 20% as compared to screening by X-ray if LDCT screening is used by patients at high

risk for lung cancer on an annual basis.

Therefore, LDCT scans are recommended for screening of an estimated 14 million Americans who

are at high risk for lung cancer.

If half of these high-risk individuals were screened, more than 12,000 lung cancer deaths could be

prevented, according to the ALA.

However, the New England Journal of Medicine article also reported that LDCT was shown to have

a low positive predictive value of less than 4%.

This means that for every 100 people who receive a positive result from LDCT screening

and are suspected of having lung cancer, only four actually have the disease.

A reliable, noninvasive, and cost-effective diagnostic

test can increase diagnosis of early-stage lung cancer while lowering the number of unnecessary and invasive procedures for patients

with a false positive result from LDCT screening.

(A false positive test result indicates that the patient has lung cancer when he or

she does not have the disease.)

The results of a large national clinical trial

that was reported in the New England Journal of Medicine in an article dated August 4, 2011, titled “Reduced Lung-Cancer

Mortality with Low-Dose Computed Tomographic Screening” showed that screening for lung cancer using low-dose computed tomography

(“LDCT”) resulted in a reduction of the mortality rate by up to 20% as compared to screening by X-ray if LDCT screening is

used by patients at high risk for lung cancer on an annual basis.

Therefore, LDCT scans are recommended for screening of an estimated

14 million Americans who are at high risk for lung cancer.

If half of these high-risk individuals were screened, more than 12,000 lung

cancer deaths could be prevented, according to the ALA.

However, the New England Journal of Medicine article also reported that

LDCT was shown to have a low positive predictive value of less than 4%.

This means that for every 100 people who receive a positive result

from LDCT screening and are suspected of having lung cancer, only four actually have the disease.

A reliable, noninvasive, and cost-effective

diagnostic test can increase diagnosis of early-stage lung cancer while lowering the number of unnecessary and invasive procedures for

patients with a false positive result from LDCT screening.

(A false positive test result indicates that the patient has lung cancer when

he or she does not have the disease.)

Lung is a test for early-stage lung cancer that is designed to meet the need for greater diagnostic certainty.

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diagnostic procedures, such as biopsies, while also reducing healthcare costs.

study authored by two pulmonologists and published in 2024 in the peer-reviewed Journal of Health Economics and Outcomes Research

reported that adding CyPath ® Lung to the standard of care for Medicare patients with a positive lung cancer screening

could have saved an average of $2,773 per patient for total cost savings of $379 million in 2022, while the screening could have

saved an average of $6,460 per patient for all patients with a positive lung cancer screening for a total costs savings of $891

The peer-reviewed study, “Economic Evaluation of a Novel Lung Cancer Diagnostic in a Population of Patients with a

Positive Low-Dose Computed Tomography Result,” attributes the savings to a reduction in follow-up diagnostic assessments,

expensive follow-up procedures and procedure-related complications.

Morris, M.D., Brooke Army Medical Center (“BAMC”) pulmonology and critical care physician and

Assistant Dean of Research at San Antonio Uniformed Services Health Education Consortium (“SAUSHEC”), and Sheila A.

M.D., Director of the Pulmonary Lung Nodule Clinic and the Lung Cancer Screening Program at the South Texas Veterans Health Care Systems’

Murphy Memorial Veterans Hospital and Assistant Professor at the University of Texas Health Science Center at San Antonio, were

first and second authors on the study published in the Journal of Health Economics and Outcomes Research .

Economists John E.

Ph.D., and Maggie L.

Do Valle, Master of Public Health, of Avalon Health Economics also contributed to the study.

Lung uses flow cytometry technology to detect and analyze cell populations in a person’s sputum, or phlegm, to find characteristics

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any malignancy in the lungs and can provide information about its area of field cancerization and the lung microenvironment.

While studies

have shown that expert cytological analysis of sputum can detect cancerous and pre-malignant cells, the level of scrutiny required for

the analysis is not feasible in the laboratory routine, according to an October 22, 2009, article, “Premalignant and malignant

cells in sputum from lung cancer patients,” published in Cancer Cytopathology .

The process of looking at microscopy slides

is an extremely laborious approach and demands years of expertise.

CyPath ® Lung uses flow cytometry and automated data

analysis developed by AI that allows for an entire sample of sputum averaging 16 million cells to be examined in approximately 30 minutes,

allowing for cost-effective, large-scale commercialization.

particular, CyPath ® Lung uses a synthetic porphyrin called meso-tetra (4-carboxyphenyl) porphyrin (“TCPP”).

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Village Oaks developed CyPath ® Lung for sale as an LDT in accordance with the standards of the CAP and the

regulations and guidance of the CLIA program, which is administered by CMS.

Lung can be put into routine lab use without requiring expert evaluation of samples or being subject to operator bias.

regulations and guidance of the CLIA program, which is administered by the Centers for Medicare and Medicaid Services (“CMS”).

Lung has been put into routine lab use without requiring expert evaluation of samples or being subject to operator bias.

allows the entire sputum sample to be rapidly analyzed.

The numerical analysis developed with machine learning captures complex interactions

between lung cancer, the microenvironment, and areas of field cancerization that would be difficult if not impossible for individuals

to predict or detect reliably by eye.

For example, during test development, we discovered that viability staining density suggests a

link with apoptosis, or cell death, that is linked to many cancers, including lung cancer.

Our model also suggests that specific markers

of immune cell populations may be informative as to the presence of cancer in the lung.

These findings are the result of our machine

learning approach to automated analysis.

between lung cancer, the microenvironment, and areas of field cancerization that would be impossible for individuals to predict or detect

reliably by eye.

For example, during test development, we discovered that viability staining density suggests a link with apoptosis,

or cell death, that is linked to many cancers, including lung cancer.

Our model also suggests that specific markers of immune cell populations

are informative as to the presence of cancer in the lung.

These findings are the result of our machine learning approach to automated

Lung uses sputum that is obtained noninvasively by patients in the privacy of their home.

Physicians most often order the test

for patients after CT imaging reveals one or more pulmonary nodules that are suspected to be lung cancer.

A patient collects his or her

sample using a hand-held, noninvasive assist device, ICU Medical’s Acapella ® Choice Blue, that acts to break up

mucus in the lungs and help a person cough up sputum from the lung into a collection cup.

The Acapella ® Choice Blue has

been 510(k) cleared by the FDA as a positive expiratory pressure device to help mobilize lung secretions in people with certain lung

for patients after CT imaging reveals one or more pulmonary nodules that have a higher risk but are not certain to be lung cancer.

patient collects his or her sample using a hand-held, noninvasive assist device, ICU Medical’s Acapella ® Choice

Blue, that acts to break up mucus in the lungs and help a person cough up sputum from the lung into a collection cup.

The Acapella ®

Choice Blue has been 510(k)-cleared by the FDA as a positive expiratory pressure device to help mobilize lung secretions in people

with certain lung conditions

sputum sample is shipped overnight by the patient to PPLS and processed into a single-cell suspension, then labeled with antibodies that

distinguish different cell types and the synthetic porphyrin TCPP that identifies cancer cells and/or cancer-associated cells.

can analyze an average sputum sample containing about 16 million cells in approximately 30 minutes using integrated software for high-throughput,

user-friendly standardized analysis of flow cytometric sample data.

A physician’s report is generated within minutes after data

The report stratifies the patient into one of two risk groups.

Those patients deemed “likely or very likely”

to have cancer may benefit from aggressive intervention.

Those “unlikely or very unlikely” to have a malignancy may continue

imaging surveillance.

The physician also receives a numerical score between 0.1 to 1.0, with 0.1-0.49 being a negative result and 0.5

to 1.0 considered positive for lung cancer.

The proprietary automated analysis software was developed and is wholly owned and patent

protected by bioAffinity Technologies.

can collect sample data and analyze a sputum sample in less than 30 minutes using integrated software for high-throughput, user-friendly

standardized analysis.

A physician’s report is generated within minutes after data acquisition.

The report stratifies the patient

into one of two risk groups.

Those patients deemed “likely or very likely” to have cancer may benefit from aggressive intervention.

Those “unlikely or very unlikely” to have a malignancy may continue imaging surveillance in accordance with local standard

The physician’s report also shows a numerical score between 0.1 to 1.0,

with 0.1 to less than 0.5 being a negative result and 0.5 to 1.0 considered positive for lung cancer.

The proprietary automated analysis

software was developed and is wholly owned and patent protected by bioAffinity Technologies.

receive test results within three days after the laboratory receives the patient’s sputum sample.

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When CyPath ®

Lung sample analysis determines a patient is unlikely or very unlikely to have lung cancer, the result can serve to support a physician’s

decision to monitor this patient by following a recommended LDCT screening routine.

Lung sample analysis determines a patient is unlikely or very unlikely to have lung cancer, the result can serve to guide and support

a physician’s decision to monitor the patient using LDCT or CT imaging.

reported in an article titled “Detection of Early-Stage Lung Cancer in Sputum using Automated Flow Cytometry and Machine Learning,”

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For the subset of patients in this trial who had lung nodules

20 mm or smaller or no nodules at all, this trial resulted in 92% sensitivity, 87% specificity, 99% negative predictive value, and 88%

In this subset of 132 individuals with small nodules, 119 patients were cancer-free and 13 had confirmed lung cancer.

out of 10 (80%) of Stage I tumors were correctly identified.

Sensitivity is the percentage of persons with the disease – in this

case, lung cancer – who are correctly identified by the test.

Specificity is the percentage of persons without lung cancer who

are correctly identified by the test.

The cancer group included all lung cancer types, but mostly squamous cell carcinoma and adenocarcinoma

lung cancer (in near equal numbers), showing that CyPath ® Lung detects all types of lung cancer.

The detection of small

lung nodules in people who have early-stage cancer can increase lung cancer survival.

this 19-month test validation trial participants provided a sputum sample and were released from the study after a physician either confirmed

the individual was cancer-free by examination of CT imaging or confirmed the presence of lung cancer by biopsy.

Flow cytometry and patient

data used in the analysis produced results that included (1) the proportion of cells with a high ratio of high TCPP fluorescence intensity

over cell size;

(2) the proportion of cells with an intermediate ratio of fluorescence intensity caused by the viability dye (FVS510)

over cell size;

20 mm or smaller or no nodules detected by imaging, this trial resulted in 92% sensitivity, 87% specificity, 99% negative predictive

value, and 88% accuracy.

In this subset of 132 individuals with small nodules, 119 patients were cancer-free and 13 had confirmed lung

Eight out of 10 (80%) of Stage I tumors were correctly identified.

Sensitivity is the percentage of persons with the disease

– in this case, lung cancer – who are correctly identified by the test.

Specificity is the percentage of persons without

lung cancer who are correctly identified by the test.

The cancer group included all lung cancer types, but mostly squamous cell carcinoma

and adenocarcinoma lung cancer (in near equal numbers), showing that CyPath ® Lung detects all types of lung cancer.

clinical trial results reported an Area Under the Curve (AUC) value of 0.89 for CyPath ® Lung.

AUC value indicates the

ability of a test to distinguish between positive and negative cases.

An AUC value of 0.7 to 0.8 is considered acceptable;

is excellent;

more than 0.9 is outstanding.

In study participants with lung nodules less than 20 mm, the test performed with an AUC value

this 19-month trial, participants provided a sputum sample and were released from the study after a physician either confirmed the individual

was cancer-free by examination of CT imaging or confirmed the presence of lung cancer by biopsy.

Flow cytometry and patient data used

in the analysis produced results that included (1) the proportion of cells with a high ratio of high TCPP fluorescence intensity over

(2) the proportion of cells with an intermediate ratio of fluorescence intensity caused by the viability dye (FVS510) over

(3) the proportion of cells that were CD206 negative but positive for one or more of the following markers:

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The length of the study and specific follow-up was not reported,

but researchers did report that one patient entering the study as a healthy subject was correctly diagnosed with cancer by the test.

Later, a blinded clinical trial was conducted and results published September 2015 in an article titled “Early Detection of Lung

Cancer with Meso-Tetra (4-Carboxyphenyl) Porphyrin-Labeled Sputum” in the Journal of Thoracic Oncology .

This study reported

on an earlier version of CyPath ® Lung that used a fluorescent microscope to directly identify cells labeled with TCPP

in one-third or less of the sputum sample.

For each trial participant, researchers manually scanned 12 microscope slides labeled with

TCPP for the presence of red fluorescent cells (“RFCs”) displaying a spectral signature that indicated uptake of TCPP in

In addition to measuring the spectral signature, the fluorescent intensity and cell size of RFCs were measured.

The test data,

including fluorescent intensity over cell size, was analyzed.

The trial was conducted over 24 months and resulted in 81% test accuracy,

77.9% sensitivity, and 65.7% specificity in the ability to correctly differentiate between samples from lung cancer patients and those

at high risk who were cancer-free.

The Patriquin trial required participants to provide a sputum sample and CT imaging of the lungs.

but researchers did report that one patient in the study who had been incorrectly considered to be a healthy subject was correctly

diagnosed with cancer by the test.

Later, a blinded clinical trial was conducted and results published September 2015 in an article titled

“Early Detection of Lung Cancer with Meso-Tetra (4-Carboxyphenyl) Porphyrin-Labeled Sputum” in the Journal of Thoracic

This study reported on an earlier version of CyPath ® Lung that used a fluorescent microscope to directly

identify cells labeled with TCPP in one-third or less of the sputum sample.

For each trial participant, researchers manually scanned

12 microscope slides labeled with TCPP for the presence of red fluorescent cells (“RFCs”) displaying a spectral signature

that indicated uptake of TCPP in the cell.

In addition to measuring the spectral signature, the fluorescent intensity and cell size of

RFCs were measured.

The test data, including fluorescent intensity over cell size, was analyzed.

The trial was conducted over 24 months

and resulted in 81% test accuracy, 77.9% sensitivity, and 65.7% specificity in the ability to correctly differentiate between samples

from lung cancer patients and those at high risk who were cancer-free.

The earlier trial required participants to provide a sputum sample

and CT imaging of the lungs.

Those in the cancer cohort underwent a biopsy to confirm lung cancer.

High-risk patients displaying indeterminate nodules were followed

for 18 months to confirm they were cancer-free.

The Patriquin study concluded that optimizing the test to provide for analysis of the

entire sputum sample would improve results.

High-risk patients displaying indeterminate

nodules were followed for 18 months to confirm they were cancer-free.

The study concluded that optimizing the test to provide for analysis

of the entire sputum sample would improve results.

January 1, 2024, the Medicare reimbursement code 0406U specific for CyPath ® Lung became effective after multiple regulatory

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Lung, which was publicly released on June 30, 2023.

The new CPT code became effective for use on October 1, 2023.

On November 30, 2023,

we announced CMS’ final determination for payment for CyPath ® Lung, and CyPath ® Lung is on CMS’

2024 clinical laboratory fee schedule.

The CPT PLA code assigned to CyPath® Lung is 0406U with the descriptor “Oncology (lung),

flow cytometry, sputum, 5 markers (meso-tetra [4- carboxyphenyl] porphyrin [TCPP], CD206, CD66b, CD3, CD19), algorithm reported as likelihood

of lung cancer.”

CyPath ® Lung is on CMS’ clinical laboratory fee schedule.

CPT PLA code assigned to CyPath ® Lung is 0406U with the descriptor “Oncology (lung), flow cytometry, sputum, 5 markers

(meso-tetra [4- carboxyphenyl] porphyrin [TCPP], CD206, CD66b, CD3, CD19), algorithm reported as likelihood of lung cancer.”

have an agreement with GO2 Partners to produce patient collection kits and to provide warehousing and distribution services for sending

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Cancer Diagnostics Market and CyPath ® Lung

global cancer diagnostic market is projected to grow from an estimated $102.24 billion in 2022 to $162.57 billion in 2030, with a compound

annual growth rate (“CAGR”) of 6.1%, according to a market research report issued by Research and Markets in June

A January 2023 report, also by Research and Markets , stated that the market worldwide for lung cancer diagnostic tests was

estimated at $2.6 billion in 2022 and is projected to reach $4.7 billion by 2030, with a CAGR of 7.8% over 2022-2030.

We have the potential

to play a significant role in the cancer diagnostic market because our platform is noninvasive, cost-effective, and has the potential

to lead to better patient outcomes.

global lung cancer diagnostic market is projected to grow from an estimated $15.1 billion in 2023 to $34.8 billion by the end of 2034,

with a compound annual growth rate (“CAGR”) of 7.9%, according to a market research report issued by Transparency Market

Research in October 2024.

Our Company has the potential to play a significant role in the global cancer diagnostic market because we

hold a strong and expanding IP portfolio for CyPath ® Lung, a noninvasive, cost-effective, and high performing test that

has the potential to better patient outcomes.

of CyPath ® Lung to Current Standards of Care

of Early-Stage Lung Cancer in Sputum using Automated Flow Cytometry and Machine Learning,” published in Respiratory Research

on January 21, 2023

risk – nodules less than 20 mm

of Early-Stage Lung Cancer in Sputum using Automated Flow Cytometry and Machine Learning,” published in Respiratory Research

on January 21, 2023

of initial low dose computed tomographic screening for lung cancer,” published in the New England Journal of Medicine

on May 23, 2013

of FDG-PET to diagnose lung cancer in areas with infectious lung disease:

Diagnostic Test or Procedure

Intended Patient

Procedural Risk

CyPath ® Lung ‌

“Detection of Early-Stage Lung Cancer in Sputum using Automated Flow Cytometry and Machine Learning,” published in Respiratory Research on January 21, 2023

CyPath ® Lung

High risk – nodules less than 20 mm

“Detection of Early-Stage Lung Cancer in Sputum using Automated Flow Cytometry and Machine Learning,” published in Respiratory Research on January 21, 2023

Low-dose CT screening

Radiation exposure

“Results of initial low dose computed tomographic screening for lung cancer,” published in the New England Journal of Medicine on May 23, 2013

FDG PET imaging

Suspicious lung nodules

Radiation exposure

“Accuracy of FDG-PET to diagnose lung cancer in areas with infectious lung disease:

a meta-analysis,” published in JAMA in September 2014

lung nodules – central lesions

Suspicious lung nodules – central lesions

collapsed/bleeding lung;

bronchial genomic classifier for the diagnostic evaluation of lung cancer,” published in the New England Journal of Medicine

on July 16, 2015

needle biopsy

“A bronchial genomic classifier for the diagnostic evaluation of lung cancer,” published in the New England Journal of Medicine on July 16, 2015

Fine needle biopsy

Suspicious lung nodules

collapsed/bleeding lung;

aspiration biopsy versus core-needle biopsy in diagnosing lung cancer:

a systemic review,” published in Current Oncology

in February 2012

needle biopsy 21

“Fine-needle aspiration biopsy versus core-needle biopsy in diagnosing lung cancer:

a systemic review,” published in Current Oncology in February 2012

Core needle biopsy 21

Suspicious lung nodules

collapsed/bleeding lung;

patterns and trends in lung cancer incidence:

a population-based study,” published in the Journal of Thoracic Oncology

on February 16, 2021

business model is to immediately address the need for a quick-to-market, noninvasive, cost-effective lung cancer diagnostic that will

save lives and reduce medical costs.

Preventive Services Task Force recommended new guidelines for screening in March 2021,

nearly doubling the number of Americans at high risk for lung cancer who are recommended for annual screening to 14 million people, according

In November 2023, the American Cancer Society updated its guidelines for lung cancer screening to include all former smokers

over the age of 50 regardless of when they quit, increasing the number of American adults eligible for screening to 19 million.

has an estimated 300 million smokers, according to the World Health Organization.

In Europe, it is estimated that there is one new case

of lung cancer diagnosed every minute, with incidence rates for males the highest in Eastern European countries and a five-year survival

rate of only 13%, as reported by a May 2021 article, “Lung cancer screening in Europe:

where are we in 2021?” published in

Translational Lung Cancer Research.

We expect to pursue CE marking of CyPath ® Lung for sale in the European Union.

conducted market research in the U.S.

with pulmonologists, oncologists, cardiothoracic surgeons, radiologists, and internists engaged

in the diagnosis and treatment of lung cancer to help assess their reactions to our diagnostic tool.

Research revealed a strong interest

in CyPath ® Lung, driven by the high level of unmet clinical need for noninvasive diagnostics.

A survey conducted with

240 pulmonologists and internists, the primary audience for the test, showed that 96% would use CyPath ® Lung if it were

available today as an adjunct used for diagnosis after LDCT screening.

Physicians responded favorably to a noninvasive diagnostic technology

that gives them more confidence in their decision to proceed with more aggressive follow-up procedures if the test comes back positive.

If test results are negative, physicians can rule out lung cancer, thus reducing the number of costly invasive procedures that result

from the LDCT false-positive rate.

“Global patterns and trends in lung cancer incidence:

a population-based study,” published in the Journal of Thoracic Oncology on February 16, 2021

seen in the above table, CyPath ® Lung performs similar to current Standard of Care, including more invasive and riskier

diagnostic procedures.

Moreover, lung nodules are commonly found on CT scans.

Studies suggest up to 50% of lung nodules may be considered

“indeterminate” without clear indication of being benign or malignant, posing difficult choices for physicians and their

patients on steps.

Our business model is to address the need for a noninvasive, cost-effective, high-performing lung cancer diagnostic

that meets the need for more diagnostic certainty leading to quicker diagnosis at earlier stage for longer survival and reduced medical

Preventive Services Task Force recommended new guidelines for screening in March 2021, nearly doubling the number of

Americans at high risk for lung cancer who are recommended for annual screening to 14 million people, according to the ALA.

2023, the American Cancer Society updated its guidelines for lung cancer screening to include all former smokers over the age of 50 regardless

of when they quit, increasing the estimated number of American adults eligible for screening to 19 million.

China has an estimated 300

million smokers, according to the World Health Organization.

In Europe, it is estimated that there is one new case of lung cancer diagnosed

every minute, with incidence rates for males the highest in Eastern European countries and a five-year survival rate of only 13%, as

reported by a May 2021 article, “Lung cancer screening in Europe:

where are we in 2021?” published in Translational Lung

Cancer Research.

We expect to pursue CE marking of CyPath ® Lung for sale in the European Union (“EU”).

Lung Business Development Plan

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EU, and worldwide that are timed to maximize our resources and minimize market risk.

Phase 1 of our business plan has already begun with

a limited market launch of our LDT CyPath ® Lung in Texas.

This limited test market launch is designed to evaluate our

marketing program and help us ensure each step in the care pathway – from the initial order by physicians to sputum collection

Phase 1 of our business plan was completed in 2024

with a limited market launch of our LDT CyPath ® Lung in Texas.

This limited test market launch was designed to evaluate

our marketing program and help us ensure each step in the care pathway – from the initial order by physicians to sputum collection

and processing, to generating and delivering the patient report – is efficient and effective.

This limited test market approach

allows us to refine future positioning and develop strategic insight for our CyPath ® Lung test before expanding to a larger

believe that our strategy related to a limited market launch is proving successful.

On March 5, 2024, we reported accelerating growth

of 375% in CyPath ® Lung tests ordered and processed over from December 1, 2023, through February 29, 2024, as compared

to the prior three-month period.

We attribute the growth in sales to three 2023 initiatives that came to fruition early in 2024:

CMS’ inclusion of reimbursement for CyPath ® Lung on its 2024 clinical laboratory fee schedule;

(2) the hiring of

our new National Director of Sales, Dallas Coleman, who is experienced and well respected in the pulmonary field;

and (3) marketing materials

for the newly branded CyPath ® Lung that emphasize our test’s ability to assist physicians with next steps in patient

next step in our marketing plan is expansion into the Southwest market area in 2024 followed by a staged nationwide expansion of sales

and marketing beginning later in 2024.

In addition to introducing pulmonologists, family practitioners, and other providers to CyPath ®

Lung, we are selling CyPath ® Lung tests to the Department of Defense, which represents a significant potential market

for CyPath ® Lung.

Phase 2 of our business plan anticipates entering the EU market with CyPath ® Lung as

a CE-marked IVD test with sales in the Netherlands, followed by a staged EU expansion.

Phase 3 of our business plan focuses on the marketing

of an FDA-cleared CyPath ® Lung test, beginning with a pivotal clinical trial in the U.S.

Toward that end, we intend to

voluntarily seek FDA clearance of the CyPath ® Lung as a Class II IVD medical device for the detection of lung cancer.

We have designed our pivotal trial with guidance from our Clinical Research Organization (“CRO”), Courante Oncology, and

we are preparing a pre-submission that will be submitted to the FDA for review and feedback.

We anticipate a three-year diagnostic trial

including an 18-month patient enrollment of approximately 1,800 patients.

Similar to the test validation trial, the planned pivotal trial

will analyze flow cytometry and patient data including (1) the proportion of cells with a high ratio of high TCPP fluorescence intensity

over cell size;

(2) the proportion of cells with an intermediate ratio of fluorescence intensity caused by the viability dye (FVS510)

over cell size;

allowed us to refine future positioning and develop strategic insight for our CyPath ® Lung test before expanding to a

larger market.

believe that our strategy related to a limited market launch proved successful.

In January 2025, we reported the results of the

Company’s CyPath ® Lung pilot marketing program using Texas for our beta launch with sales growth

Quarter-over-Quarter and more than 600 tests delivered in 2024.

We attribute the growth in sales to three 2023 initiatives that came

to fruition in 2024:

(1) CMS’ inclusion of reimbursement for CyPath ® Lung on its 2024 clinical laboratory fee

schedule and subsequent reimbursement by Medicare and private insurance carriers;

(2) the hiring of our new National Director of

Sales in late 2023 and subsequent sales persons in 2024 who are experienced and well respected in the pulmonary

and (3) marketing materials for the newly branded CyPath ® Lung that emphasize our test’s ability to

assist physicians with next steps in patient care.

October 2024, CyPath ® Lung was awarded listing on the U.S.

Federal Supply Schedule (FSS), making the test available to

Veterans and active military personnel across government health systems.

We view this market opportunity as the next step in

expanding sales nationally in the U.S., including strategic expansion into regional markets in 2025.

Phase 2 of our business plan anticipates

entering the EU market with CyPath ® Lung as a CE-marked IVD test beginning with sales in the Netherlands, followed by

a staged EU expansion.

Phase 3 of our business plan focuses on the marketing of an FDA-cleared CyPath ® Lung test, beginning

with conducting a pivotal clinical trial in the U.S.

Toward that end, we have voluntarily sought FDA guidance with the intention of obtaining

clearance after completion of the pivotal trial of a Class II IVD medical device for use in the diagnosis of lung cancer in individuals

with indeterminate pulmonary nodules between 6 mm to less than 20 mm.

To differentiate our LDT test from the future FDA cleared diagnostic test,

we have named the test for which we are seeking FDA clearance “FlowPath Lung.” In December 2024, we met with FDA to discuss

our pre-submission and subsequently incorporated the requested protocol changes to improve the trial design.

Our revised trial protocol

is now under review by an IRB.

In third quarter 2024, the National Association of Veterans

Research and Education Foundation (“NAVREF”) extended a “Call for Interest” to VA systems to solicit participation

in the pivotal trial, which resulted in a positive response from 22 VA medical centers.

We are in the process of qualifying VA, academic

and private medical centers that have asked to participate.

Our Clinical Research Organization (“CRO”) is Courante Oncology.

Retired Army Col.

Michael Morris, MD., of Brooke Army Medical Center has accepted the position as national Principal Investigator for

the clinical trials.

We anticipate a three-to-four-year clinical trial including an 18-month patient enrollment of approximately 3,400

patients, with the first clinical site expected to open and patient enrollment expected to begin in in the second quarter of 2025.

pivotal trial will analyze sputum using flow cytometry data and patient data using the algorithm used for our LDT

CyPath ® Lung, including (1) the proportion of cells with a high ratio of high TCPP fluorescence intensity over cell

(2) the proportion of cells with an intermediate ratio of fluorescence intensity caused by the viability dye (FVS510) over

(3) the proportion of cells that were CD206 negative but positive for one or more of the following markers:

CD66b (granulocytes),

CD3 (T cells), and CD19 (B cells);

(granulocytes), CD3 (T cells), and CD19 (B cells);

and (4) patient age.

Patient enrollment is scheduled to begin in 2024 at up to 20 collection sites.

Assuming the study is successful, we intend to submit a de novo classification request to the FDA within six months of study completion.

Phase 4 of our business plan accelerates the market presence of CyPath ® Lung in countries in Asia, Eastern Europe, and

Australia after obtaining FDA marketing authorization.

each phase of commercialization, we plan to develop messaging and marketing programs, including key convention attendance, digital marketing,

social media presence, and advertising, to create an “inbound” lead generation mechanism that delivers our message to our

target audience.

In addition, we plan to collaborate with key opinion leaders (“KOLs”) to expand our pool of third-party

experts and speakers.

We will provide support and collateral materials, including posters, presentations, videos, and peer-reviewed papers,

to our KOLs who will present data and their experience with CyPath ® Lung at key meetings.

This content can be shared across

platforms, including websites and sales tools, and will be used as references to support our product claims as well as sales and marketing

efforts to physicians, reference laboratories, and patients.

We will also work with lung cancer advocacy groups throughout all phases

to support the message that routine screening can save lives by diagnosing cancer at an early stage.

Patient enrollment is scheduled to begin in the second

quarter of 2025 at up to 20 collection sites.

Assuming the study is successful, we intend to submit a de novo classification request

to the FDA within six months of study completion.

Phase 4 of our business plan accelerates the market presence of CyPath ® Lung

as well as countries in Asia, Eastern Europe, and Australia after obtaining FDA marketing authorization.

have developed messaging and marketing programs that will continue to grow both in size and scope with each phase of development, including

key convention attendance, digital marketing, social media presence, and advertising, to create an “inbound” lead generation

mechanism that delivers our message to our target audience.

In addition, we will continue to expand our collaboration with regional and

national key opinion leaders (“KOLs”) and support efforts with collateral materials, including posters, presentations, videos,

and peer-reviewed papers, to our KOLs who will present data and case studies of their use of CyPath ® Lung.

can be shared across platforms, including websites and sales tools, and will be used as references to support our product claims as well

as sales and marketing efforts to physicians, reference laboratories, and patients.

We are also working with lung cancer advocacy groups

throughout all phases to support the message that routine lung cancer screening can save lives by diagnosing cancer at an early stage.

Competition for CyPath ® Lung

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Therefore, rule-in tests have a low positive predictive value.

believe that balanced tests, like CyPath ® Lung, can be the most cost effective.

Those that perform well are most useful

to a physician and his or her patient because they provide the most information, allowing a quicker decision on what follow-up path to

whether to move forward with more aggressive follow-up procedures (i.e., in the case of CyPath ® Lung, if the test

reveals a “likely” or “highly likely” cancer result) or to follow a more conservative approach (i.e., when the

CyPath ® Lung test reveals an “unlikely” or “very unlikely” cancer result).

completed a competitive analysis in 2022 of 67 companies that published research sufficient to provide a scientific basis for evaluation.

We found only seven tests, including CyPath ® Lung, that represent a balanced test for early lung cancer detection and

have advanced to the point that there is sufficient data for evaluation.

The recent economic journal article evaluating the significant healthcare

cost benefits of using CyPath ® Lung as a standard of care (Morris, et al., 2024) shows that balanced tests, like CyPath ®

Lung, can be the most cost effective.

Those that perform well are most useful to a physician and his or her patient because they provide

the most information, allowing a quicker decision on what follow-up path to choose:

whether to move forward with more aggressive follow-up

procedures (i.e., in the case of CyPath ® Lung, if the test reveals a “likely” or “highly likely”

cancer result) or to follow a more conservative approach (i.e., when the CyPath ® Lung test reveals an “unlikely”

or “very unlikely” cancer result).

competitive analysis reviewed published research that was sufficient to provide a scientific basis for evaluation.

We found only seven

tests, including CyPath ® Lung, that represent a balanced test for early lung cancer detection and have advanced to the

point that there is sufficient data for evaluation.

One test is sold by two companies:

one from the U.S.

In the U.S., the test is called Lung LB (sold by LungLife AI) and is now on the market.

LungLB is a FISH-based test that

requires a significant amount of experience to conduct.

Four companies, each selling unique tests for early lung cancer detection, conducted

their studies on a population that does not match the high-risk population for which the test is intended.

Their clinical data, therefore,

is not necessarily representative of the results that would be achieved in the population of patients who actually will use the test.

The remaining balanced test, ProLung, is from IONIQ Sciences.

and one from China.

the test is called Lung LB (sold by LungLife AI) and is now on the market.

LungLB is a FISH-based test that requires a significant amount

of experience to conduct.

Four companies, each selling unique tests for early lung cancer detection, conducted their studies on a population

that does not match the high-risk population for which the test is intended.

Their clinical data, therefore, is not necessarily representative

of the results that would be achieved in the population of patients who actually will use the test.

The remaining balanced test, ProLung,

is from IONIQ Sciences.

The test requires an expensive machine to measure transcutaneous bioconductance.

The test is not on the market at this time.

First Look was recently launched to assist in determining whether a person should be screened by LDCT.

While CyPath Lung ®

is positioned to help diagnose lung nodules in patients who have already undergone screening by LDCT, First Look is intended to be used

prior to LDCT.

As such, this test may increase lung cancer screening uptake and potentially increase the need for CyPath Lung ® .

The test is not on the market

at this time.

First Look was recently launched to assist in determining whether a person

should be screened by LDCT.

While CyPath ® Lung is positioned to help diagnose lung nodules in patients who have already

undergone screening by LDCT, First Look is intended to be used prior to LDCT.

As such, this test may increase lung cancer screening

uptake and potentially increase the need for CyPath ® Lung.

found two rule-out tests on the market.

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value of 43.2%.

Importantly, no patients were excluded from the CyPath ® Lung test.

Importantly, CyPath ® Lung trial participants included those at high risk for lung cancer as defined by

CMS, and none were excluded based on physician’s judgement which can be highly subjective.

The tests had negative predictive values

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Lung with an AUC of 0.89 and 0.90 in two independent study groups (excellent).

the Percepta nasal swab test offered by Veracyte is not widely available and is seeking a reimbursement code.

The test classifies patients

in low- and high-risk categories, or for those whose results are unclear, an intermediate category.

Test performance is different in

each risk category.

In a recently published paper of the test validation trial, the sensitivity and specificity for low-risk classification

the Percepta nasal swab test offered by Veracyte is not widely available and reportedly is seeking a reimbursement code.

The test classifies

patients in low- and high-risk categories, or for those whose results are unclear, an intermediate category.

Test performance is different

in each risk category.

In a 2023 published paper of the test validation trial, the sensitivity and specificity for low-risk classification

was 97% and 40%, respectively, with those at low risk having an 8% calculated risk of having a malignancy.

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realistic cohorts with a cancer prevalence lower than 10%.

Although it is a patient-friendly test, a major limitation of the test is

that nearly half of all patients who took part in the validation trial could not be classified as either low- or high-risk;

they are considered “intermediate risk” with a 50:50 chance of having cancer.

Thus, in nearly half of the patients who received

the Percepta nasal swab test, the results would not help advance the diagnostic process.

In fact, for those patients in this indeterminate

category who do have cancer, valuable time in diagnosis may be lost.

In addition, nearly half of all patients who took part in the validation trial

could not be classified as either low- or high-risk;

instead, they are considered “intermediate risk” with a 50:50 chance

of having cancer.

Thus, in nearly half of the patients who received the Percepta nasal swab test, the results would not help advance

the diagnostic process.

In fact, for those patients in this indeterminate category who do have cancer, valuable time in

diagnosis may be lost.

believe there are many reasons why CyPath ® Lung is a superior test when compared to its competitors.

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reimbursement code billable to both government and private insurance carriers.

Fifth and as important as any of our test’s benefits,

CyPath ® Lung is patient friendly, providing at-home sample collection that is noninvasive and offers particular benefit

during a public healthcare crisis like the coronavirus pandemic.

and Development Activities

are continuing our research and development activities pertaining to diagnostics that include multiple studies we believe will support

FDA final approval of CyPath ® Lung, which we will seek after completing the pivotal trial.

With support from the DOD,

we are also conducting research advancing the development of CyPath ® Lung for detection of COPD and a test for use with

bronchoalveolar lavage fluid (BAL) as a companion test to bronchoscopy.

With regard to therapeutic research, we continue our experiments

focused on establishing proof-of-concept for our discovery that the silencing or knockdown of two genes that each encode a cell surface

receptor result in cancer death without perceived harm to healthy cells.

Diagnostic Applications for the CyPath ® Platform

expect to expand our platform technology to detect and monitor other lung diseases.

Our research is conducted, in part, in collaboration

with Brooke Army Medical Center in San Antonio, Texas, and partially funded by the DOD.

Obstructive Pulmonary Disease and Other Diseases of the Lung.

respiratory diagnostics market was valued at $5.6 billion in 2023 and is expected to reach $8.2 billion by 2029, according to a market

research study published by Research and Markets in November 2023.

The World Health Organization reports that COPD is the third

leading cause of death in the world, causing nearly 3.23 million deaths in 2019.

The disease is characterized as an abnormal inflammatory

response and airflow obstruction that cannot be fully reversed.

Early detection allows for the use of therapies when the disease is less

severe, which slows the progression of the disease.

We plan to build on our expertise in using sputum as a sample for flow cytometric

analysis to develop a test to detect COPD at an early stage and monitor for signs of impending exacerbations before clinical signs occur.

CyPath ® Lung’s flow cytometry platform provides for identification of cell populations and other parameters of disease

Our test illuminates the microenvironment of the lung.

We believe that our flow cytometric test can be designed to identify

other lung diseases, such as COPD and asthma, using antibodies that characterize cell populations in sputum specific to the disease.

Bronchoscopies.

market research firm Markets and Markets reports that the bronchoscopy market is primarily driven by an increasing prevalence of various

respiratory diseases such as COPD and lung cancer.

Improving reimbursement code policies, growing hospital investment in bronchoscopy

facilities, and technological advancements are factors driving growth of a market that was estimated at $2.5 billion in 2022 and expected

to reach an estimated $3.7 billion in 2027.

Despite advancements in bronchoscopy technologies, there remains a significant need for companion

tests that can increase diagnostic performance.

Bronchoscopy is considered minimally invasive but carries a risk of collapsed or bleeding

lung and risk of infection.

The sensitivity of bronchoscopy is 88% and specificity of 47%, according to the article “A bronchial

genomic classifier for the diagnostic evaluation of lung cancer” published in the New England Journal of Medicine on July

In collaboration with Brooke Army Medical Center, the CyPath ® process is being developed as a companion to bronchoscopy

in which samples are collected as part of the bronchoscopy process and processed using flow cytometry and automated analysis developed

A 2024 study authored by Michael Morris, M.D., and Sheila Habib, M.D., reported on CyPath ®

Lung’s economic impact when used as companion test to the current Standard of Care predicting savings of more than $2,700 per Medicare

patient and more than $6,400 per patient with private payer insurance who have pulmonary nodules sized less than 30 mm.

Fifth and as important

as any of our test’s benefits, CyPath ® Lung is patient friendly, providing at-home, noninvasive sample collection.

on our Flow Cytometry Platform to Develop COPD and asthma precision diagnostics

are conducting research to expand our platform technology to detect other lung diseases, including development of precision diagnostics

to identify patients who can best use commercial therapies and treatments in late-stage clinical phases that treat asthma and Chronic

Obstruction Pulmonary Disease (COPD).

estimated 23 million adults in the U.S.

and 27 million people in the EU have been diagnosed with asthma;

and 4.2% of Chinese

adults presented with asthma in a representative sample of adults recruited for a national cross-sectional China Pulmonary Health study

between 2012 and 2015, representing 45.7 million adults in China.

Furthermore, an estimated 14.2 million U.S.

adults had COPD in 2021

and approximately 36.6 million people in Europe had COPD in 2020, with the expectation that almost 50 million people in Europe will have

COPD in 2050.

The diagnostics market for COPD alone was valued at $5.6 billion in 2023 and is expected to reach $8.2 billion by 2029,

according to a market research study published by Research and Markets in November 2023.

We are building on our expertise in using

sputum as a sample for flow cytometric analysis to develop tests to detect COPD and asthma, including research to detect the presence

of specific therapeutic targets to identify patients who can benefit from specific treatments.

We expect to continue research through

2025 with patient studies expected in 2026.

Therapeutics Research

Therapeutics, LLC, a Delaware limited liability company and our wholly owned subsidiary, is a preclinical-stage biopharmaceutical

discovery company with a focus on therapeutics that deliver cytotoxic (cell-killing) effects on a broad selection of human cancers from

diverse tissues while having little or no effect on normal cells.

many of our industry competitors, OncoSelect ® does not pursue therapies that depend on specific mutations, biomarkers,

or other genetic or epigenetic abnormalities for their effect.

We pursue research based on our own scientific discoveries demonstrating

that inhibition of the expression of two specific cell membrane proteins results in the selective killing of various cancer cell types

grown in the laboratory with little or no effect on normal (non-cancerous) cells.

We have established several specific areas of therapeutic

research that offer the possibility of broad applications in cancer treatment.

OncoSelect ® will use a licensing business

model for selective chemotherapeutic compounds to be developed by the Company.

have completed and expect to report at one or more scientific conferences our findings describing the results of our research to

advance our own scientific discoveries demonstrating that inhibition of the expression of two specific cell membrane proteins

results in the selective killing of various cancer cell types grown in the laboratory with little or no effect on normal

(non-cancerous) cells.

We expect to pursue additional research and clinical development in this area with strategic partners that have the

resources to advance our discoveries.

therapeutic platforms originated from our research on how TCPP, the synthetic porphyrin used in CyPath ® Lung, enters cancer

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their growth significantly but left normal cells virtually unharmed.

can be easily synthesized and are easily introduced into cells growing in a petri dish by a process called transfection.

been broadly adopted by academic and industrial researchers for the fundamental study of the function of genes and their proteins.

designed siRNAs to effectively eliminate CD320 and LRP2 protein production to study their role in TCPP uptake into the cell.

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hence, silencing both receptors is required for optimal cell killing.

These discoveries can lead to novel and very promising

therapeutic approaches for diverse cancers that do not appear to be dependent on any aberrant genetic or epigenetic profiles.

were incorporated in the State of Delaware on March 26, 2014.

Our principal executive office is located at 22211 West Interstate 10,

Suite 1206, San Antonio, Texas 78257, and our telephone number at that address is (210) 698-5334.

Our principal executive office is located at 3300 Nacogdoches, Suite 216,

San Antonio, Texas 78217, and our telephone number at that address is (210) 698-5334.

Our website address is https://www.bioaffinitytech.com/.

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property rights of others.

patent positions for biotechnology companies like us are generally uncertain and can involve complex legal, scientific, and factual issues.

patent positions for biotechnology companies like ours are generally uncertain and can involve complex legal, scientific, and factual issues.

In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be

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Any patents that we hold may be challenged, circumvented, or invalidated by third parties.

of April 1, 2024, we and our OncoSelect ® subsidiary have a patent estate that includes 16 issued U.S.

of December 31, 2024, we and our OncoSelect® subsidiary have a patent estate that includes 17 issued U.S.

and foreign counterpart

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patents and 15 foreign counterpart patents in Australia, Canada, China, France, Germany, Hong Kong, India,

Italy, Mexico, Spain, Sweden, and the United Kingdom.

Italy, Mexico, Japan, Spain, Sweden, and the United Kingdom.

We and OncoSelect® own all patents and trademarks in our intellectual

property portfolio.

patent and nine counterpart foreign patents directed at diagnostic applications expire in 2030.

patent and five counterpart foreign patents directed at therapeutic applications expire in 2037.

patent and nine counterpart foreign patents directed at diagnostic applications expire in 2030 and one foreign

patent directed at a diagnostic application expires in 2039.

patent and five counterpart foreign patents directed at therapeutic

applications expire in 2037.

regard to our diagnostic patent portfolio, we have one issued U.S.

patent and nine foreign counterpart patents in Canada, China, France,

Germany, Hong Kong, Italy, Spain, Sweden, and the United Kingdom.

With regard to our diagnostic patent applications, there are two families

of which one is directed at diagnosing lung health using flow cytometry and the other is directed at proprietary compensation beads used

in analysis by flow cytometry.

The diagnostic family of pending patent applications is directed at diagnosing lung health and includes

one pending non-provisional U.S.

patent application and eight foreign counterpart patent applications in Australia, Canada, China, European

Patent Office, Japan, Hong Kong, Mexico, and Singapore filed in 2019, one International Patent Application filed in 2022 and one International

Patent Application filed in 2023.

Also, a patent application directed at the composition of compensation beads was filed as an International

Patent application in 2022.

Germany, Hong Kong, Italy, Spain, Sweden, and the United Kingdom with another recently awarded diagnostic patent in Japan.

Our diagnostic patent applications, fall into one of two families:

one directed at diagnosing lung health using flow cytometry and the other directed at proprietary compensation beads used in analysis

by flow cytometry.

The diagnostic family of pending patent applications is directed at diagnosing lung health and includes three pending

non-provisional U.S.

patent applications and 18 foreign counterpart patent applications in Australia, Canada, China, European Patent Office,

Hong Kong, Japan, Mexico, and Singapore filed in 2019 and 2024, one non-provisional U.S.

patent application directed to compensation beads

for flow cytometry and one International Patent Application filed in 2023 directed to diagnosing lung health.

regard to our therapeutic product candidates, we have one issued U.S.

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India and Mexico, two pending U.S.

applications, and 10 foreign applications pending in Canada, China, European Patent Office, Hong Kong,

India, and Japan and one pending International Patent Application filed in 2022.

The therapeutic intellectual property is made up of

two families, including one family directed at our siRNA product candidates for the treatment of cancer, and another family directed

at our porphyrin conjugates for treating cancer.

One therapeutic patent application has been granted in China that expires in 2037.

applications, and 10 foreign applications pending in Canada, China, European Patent Office, and Hong

The therapeutic intellectual property is made up of two families, including one family directed at our siRNA product candidates

for the treatment of cancer, and another family directed at our porphyrin conjugates for treating cancer.

term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

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Products (including Medical Devices and Tests)

the U.S., medical devices, including IVDs are subject to extensive regulation by the FDA, under the federal Food, Drug and Cosmetic

Act (“FDCA”) and its implementing regulations, and certain other federal and state statutes and regulations.

and regulations govern, among other things, the design, manufacture, storage, recordkeeping, approval, labeling, promotion,

post-approval monitoring and reporting, distribution, and import and export of medical devices, including IVDs.

IVDs are a category

of medical device that can be purchased by clinical laboratories and used to perform laboratory testing.

IVDs include reagents and

instruments used to detect the presence of certain chemicals or other biomarkers in human specimens for the purpose of diagnosis or

detection of diseases or conditions.

the U.S., medical devices, including IVDs are subject to extensive regulation by the FDA, under the federal Food, Drug and Cosmetic Act

(“FDCA”) and its implementing regulations, and certain other federal and state statutes and regulations.

The laws and regulations

govern, among other things, the design, manufacture, storage, recordkeeping, approval, labeling, promotion, post-approval monitoring

and reporting, distribution, and import and export of medical devices, including IVDs.

IVDs are a category of medical device that can

be purchased by clinical laboratories and used to perform laboratory testing.

IVDs include reagents and instruments used to detect the

presence of certain chemicals or other biomarkers in human specimens for the purpose of diagnosis or detection of diseases or conditions.

IVDs can also be used to perform predictive, prognostic, and screening testing.

medical devices, IVDs may require premarket review and clearance, authorization, or approval by the FDA.

Failure to comply with

applicable requirements may subject a device and/or its manufacturer to a variety of administrative and judicial sanctions, such as

FDA refusal to approve pending premarket approval (“PMA”) applications, issuance of warning letters or untitled letters,

mandatory product recalls, import detentions, civil monetary penalties, and/or judicial sanctions, such as product seizures,

injunctions, and criminal prosecution.

Like other medical devices, IVDs may require premarket

review and clearance, authorization, or approval by the FDA.

Failure to comply with applicable requirements may subject a device and/or

its manufacturer to a variety of administrative and judicial sanctions, such as FDA refusal to approve pending premarket approval (“PMA”)

applications, issuance of warning letters or untitled letters, mandatory product recalls, import detentions, civil monetary penalties,

and/or judicial sanctions, such as product seizures, injunctions, and criminal prosecution.

Developed Tests

Lung has entered the U.S.

market as an LDT.

CyPath ® Lung completed its certification as an LDT in accordance

with CAP and CLIA regulations and guidance in 2023.

The FDA considers LDTs to be tests that are developed, validated, and performed within

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While CMS oversees clinical laboratory operations through the CLIA program, the FDA has the authority to regulate

LDTs as IVDs under the FDCA but has generally exercised enforcement discretion with regard to LDTs.

This means that even though the FDA

believes it can impose IVD regulatory requirements on LDTs, such as requirements to obtain premarket approval, authorization, or clearance,

it has generally chosen not to enforce those requirements except in cases it deemed appropriate to address significant public health

September 2023, the FDA announced a proposed rule to ensure the safety and effectiveness of LDTs by amending regulations to explicitly

say that IVDs offered as LDTs fall under the FDCA and phase out its general enforcement discretion approach for most LDTs.

policy makes it clear that the FDA intends to provide greater oversight of LDTs.

The FDA plans to finalize its ruling in April 2024 and

initiate a phased implementation process in which it will require laboratories to register their LDTs and begin the premarket review

process over the next four years.

2021, two bills were reintroduced in the U.S.

the Verifying Accurate, Leading-edge IVCT Development Act of 2020 (the “VALID

Act”), which would have expressly granted the FDA authority to regulate LDTs under a risk-based framework;

and the Verified Innovative

Testing in American Laboratories Act of 2020 (the “VITAL Act”), which would have assigned LDTs to regulation solely under

CLIA and would have directed CMS to update its CLIA regulations.

Neither of these bills were enacted.

The VALID Act was reintroduced

in March 2023.

The likelihood that Congress will pass the VALID Act, VITAL Act, or similar legislation, and the extent to which such

legislation may affect the FDA’s plans to regulate LDTs as medical devices is difficult to predict.

LDTs as IVDs under the FDCA.

On May 6, 2024, FDA promulgated a final rule phasing out over four years its enforcement discretion over

The agency said it will expect compliance with premarket review and quality system requirements for LDTs marketed after May 6, 2024.

The FDA states that the agency will generally not enforce premarket review requirements for LDTs that were marketed before May 6, 2024,

if they are not modified in certain ways.

In particular, the rule states that the LDT is exempt if marketed before May 6, 2024, and is

not modified in a way that changes its indications for use;

does not alter its operating principle;

does not include significantly different

and, the LDT does not adversely change its performance or safety specifications.

The Company has no expectation or intention

to modify CyPath ® Lung in any manner that will change its indications for use, alter its operating principal, include different

technology, or change its performance or safety specifications.

Laboratory Improvement Amendments of 1988

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The applicant has 180 days to respond, although during the COVID-19 Public Health

Emergency, the FDA has permitted companies an additional 180 days in which to respond.

Emergency, the FDA permitted companies an additional 180 days in which to respond.

Therefore, the total review time absent the Public

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Clinical trials, for both significant and nonsignificant risk devices, as well as exempt studies, must

be approved by an institutional review board (“IRB”), an appropriately constituted group that has been formally designated

be approved by an IRB, an appropriately constituted group that has been formally designated

to review and monitor biomedical research involving human subjects and which has the authority to approve, require modifications in,

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Most applications are classified as Standard Review products

that are reviewed within ten months of the date the FDA files the NDA;

applications classified as Priority Review are reviewed within

six months of the date the FDA files the NDA.

An NDA can be classified for Priority Review when the FDA determines the drug has the potential

to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared

to available therapies.

The review process for both standard and priority reviews may be extended by the FDA for three or more additional

months to consider certain late-submitted information, or information intended to clarify information already provided in the NDA submission.

that are reviewed within 10 months of the date the FDA files the NDA.

Applications classified

as Priority Review are reviewed within six months of the date the FDA files the NDA.

An NDA can be classified for Priority Review when

the FDA determines the drug has the potential to treat a serious or life-threatening condition and, if approved, would be a significant

improvement in safety or effectiveness compared to available therapies.

The review process for both standard and priority reviews may

be extended by the FDA for three or more additional months to consider certain late-submitted information, or information intended to

clarify information already provided in the NDA submission.

FDA may also refer applications for novel products, as well as products that present difficult questions of safety or efficacy, to be

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Data Collection

collection and use of personal data (including health data) in the European Economic Area (the “EEA”) are governed by the

EU General Data Protection Regulations (the “EU GDPR”) and national implementing legislation in EEA member states.

collection and use of personal data (including health data) in the European Economic Area (“EEA”) are governed by the

EU General Data Protection Regulations (“EU GDPR”) and national implementing legislation in EEA member states.

GDPR applies to any company established in the EEA and to companies established outside the EEA that process personal data in connection

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of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.

We employ 75 employees at the time of this filing, 22 employed by bioAffinity

and 53 employed by PPLS.

place significant emphasis on the recruitment, development, and retention of our employees who include award-winning scientists dedicated

to advancing scientific discovery from bench to bedside.

Of our nine employees engaged in research and development, all of whom are employed

full-time, one holds an M.D.

and six hold Ph.Ds in biology or medicinal chemistry.

Of the 53 employees at PPLS, nearly half have worked

at our clinical laboratory for more than five years.

Executive Vice President and Chief Medical and Science Officer, Vivienne Rebel, holds an M.D.

Business development is led by

our Chief Operating Officer, Xavier Reveles, who has 25 years of experience as a clinical geneticist skilled in the creation and management

of CLIA clinical laboratories, coding, and CPT reimbursement valuations.

Reveles is board certified by the American Society of Clinical

Pathology as a clinical specialist in cytogenetics who has successfully launched multiple diagnostics and commercial laboratories.

have recently attracted experienced salespeople with a proven record in the pulmonary field.

In November 2023, we hired Dallas Coleman

as National Sales Director who has more than 15 years of experience in medical sales and marketing, most recently as Executive Account

Manager for the respiratory portfolio of Olympus America’s therapeutic solutions division.

In February 2024, Cole Koeppen joined

us as Pulmonary Sales Executive for CyPath ® Lung in North Texas.

Previously, he was Territory Sales Associate for Pulmonx

Corporation, a provider of treatments for patients with COPD.

Our innovative and collaborative culture is in part responsible for our

ability to attract and retain highly skilled professionals seeking professional advancement.

employ 57 employees at the time of this filing, 21 employed by bioAffinity and 36 employed by PPLS.

We place significant emphasis on

the recruitment, development, and retention of our employees who include award-winning scientists dedicated to advancing scientific discovery

from bench to bedside.

Of our seven employees engaged in research and development, all of whom are employed full-time, three hold Ph.Ds

in biology or medicinal chemistry.

Of the 36 employees at PPLS, nearly 40% have worked at our clinical laboratory for more than five

Chief Science Officer, William Bauta, Ph.D., was the Associate Director of Science at Genzyme Corporation and held a similar position

at Ilex Products, Inc., where he was responsible for the discovery, development and FDA approval of therapeutics in the companies’

pipelines, and Manager of Medicinal and Process Chemistry at Southwest Research Institute.

Business development is led by our Chief Operating

Officer, Xavier Reveles, who has 25 years of experience as a clinical geneticist skilled in the creation and management of CLIA clinical

laboratories, coding, and CPT reimbursement valuations.

Reveles is board certified by the American Society of Clinical Pathology

as a clinical specialist in cytogenetics who has successfully launched multiple diagnostics and commercial laboratories.

We have attracted

experienced salespeople with a proven record in the pulmonary field.

In November 2023, we hired a National Sales Director

who has more than 15 years of experience in medical sales and marketing, most recently as Executive Account Manager for the respiratory

portfolio of Olympus America’s therapeutic solutions division.

Our innovative and collaborative culture is in part responsible

for our ability to attract and retain highly skilled professionals seeking professional advancement.

Outside partnerships and collaborations

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These provisions include, but are not limited to:

obligations with respect to financial data, including presenting only two years of audited

financial statements and selected financial data, and only two years of related Management’s

Discussion and Analysis of Financial Condition and Results of Operations disclosure in our

initial registration statement;

exemption from the auditor attestation requirement in the assessment of our internal control

over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended (“SOX”);

disclosure about executive compensation arrangements in our periodic reports, registration

statements, and proxy statements;

from the requirements to seek non-binding advisory votes on executive compensation or stockholder

approval of any golden parachute arrangements.

obligations with respect to financial data, including presenting only two years of audited financial statements and selected financial

data, and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure

in our initial registration statement;

exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to

the Sarbanes-Oxley Act of 2002, as amended (“SOX”);

disclosure about executive compensation arrangements in our periodic reports, registration statements, and proxy statements;

from the requirements to seek non-binding advisory votes on executive compensation or stockholder approval of any golden parachute

arrangements.

may take advantage of some or all of these provisions until we are no longer an emerging growth company.

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to those of companies that comply with the public company effective dates for these accounting standards.

are also a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended, (“the Exchange

Act”) and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies.

extent that we continue to qualify as a “smaller reporting company” as such term is defined in Rule 12b-2 under the Exchange

Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an “emerging growth

company” may continue to be available to us as a “smaller reporting company,” including exemption from compliance with

the auditor attestation requirements pursuant to SOX and reduced disclosure about our executive compensation arrangements.

We will continue

to be a “smaller reporting company” until we have $250 million or more in public float (based on our Common Stock) measured

as of the last business day of our most recently completed second fiscal quarter or in the event we have no public float (based on our

Common Stock) or a public float (based on our Common Stock) that is less than $700 million, annual revenues of $100 million or more during

the most recently completed fiscal year.

are also a “smaller reporting company” as defined in the Exchange Act and have elected to take advantage of certain of the

scaled disclosures available to smaller reporting companies.

To the extent that we continue to qualify as a “smaller reporting

company” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company,

certain of the exemptions available to us as an “emerging growth company” may continue to be available to us as a “smaller

reporting company,” including exemption from compliance with the auditor attestation requirements pursuant to SOX and reduced disclosure

about our executive compensation arrangements.

We will continue to be a “smaller reporting company” until we have $250 million

or more in public float (based on our Common Stock) measured as of the last business day of our most recently completed second fiscal

quarter or in the event we have no public float (based on our Common Stock) or a public float (based on our Common Stock) that is less

than $700 million, annual revenues of $100 million or more during the most recently completed fiscal year.

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 1. Business