What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-04-01 · 240 added, 195 removed, 133 unchanged (77% of the section changed)

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of liquidity.

Accounting Estimates – Accounting estimates are those estimates made in accordance with generally accepted accounting principles

(“GAAP”) that we believe are important to understanding the assumptions and judgments incorporated in our reported financial

results and forecasts.

Technologies, Inc.

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

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

We are advancing research into our therapeutic discoveries

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

We develop proprietary noninvasive diagnostic tests using flow

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

One of our diagnostic tests analyzes cell populations, including

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

Research and optimization of our platform technologies

are conducted in laboratories at our wholly owned subsidiary, Precision Pathology Laboratory Services, LLC (“PPLS”) and The

University of Texas at San Antonio.

Commercial laboratory services are performed at PPLS.

Accounting Estimates – Accounting estimates are those estimates made in accordance with U.S.

generally accepted accounting

principles (“GAAP”) that we believe are important to understanding the assumptions and judgments incorporated in our

reported financial results and forecasts.

We develop noninvasive diagnostics to detect early-stage lung cancer and other diseases of the lung using flow cytometry

and automated analysis developed by machine learning, a form of artificial intelligence (“AI”).

One of our diagnostic tests

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

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

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

our wholly owned subsidiary, OncoSelect ® Therapeutics, LLC, our research has led to discoveries and advancement of novel

cancer therapeutic approaches that specifically and selectively target cancer cells.

our wholly owned subsidiary PPLS, we acquired the assets of Village Oaks Pathology Services, P.A., a Texas professional association d/b/a

Precision Pathology Services, including the CAP-accredited and CLIA-certified commercial laboratory it owned, and we now own and operate

the clinical anatomic and clinical pathology laboratory.

March 6, 2024, we received aggregate gross proceeds of $2.5 million from the sale to four institutional investors (the “Purchasers”)

of (1) 1,600,000 shares of our Common Stock in a registered direct offering, and (2) Common Warrants to purchase an aggregate of 1,600,000

shares of Common Stock (the “Common Warrants”) with an exercise price of $1.64 in a concurrent private placement (the “Transactions”).

Common Stock was offered pursuant to a shelf registration statement on Form S-3 (File No.

333-275608), which was declared effective on

November 27, 2023, (as amended from time to time, the “Registration Statement”).

The Common Warrants and the shares of Common

Stock issuable upon exercise of the Common Warrants (the “Common Warrant Shares”) were issued in a concurrent private placement

and have not been registered.

The Common Warrants will be exercisable commencing on the effective date of stockholder approval for the

issuance of the shares of Common Stock issuable upon exercise of the Common Warrants (the “Stockholder Approval Date”) and

will expire on the fifth anniversary of the Stockholder Approval Date.

to the terms of the Purchase Agreement, until 60 days following the closing of the Transactions, we have agreed not to issue (or enter

into any agreement to issue) any shares of Common Stock or Common Stock equivalents, subject to certain exceptions.

We have further agreed

not to enter into an agreement involving a variable rate transaction until 12 months following the closing of the Transactions, provided

however that the prohibition on “at-the-market offerings” and the issuance of common stock pursuant to an equity line of

credit shall expire on the six-month anniversary of the closing date of this offering.

In addition, our Chief Executive Officer and each

of our directors have entered into lock-up agreements with the Company pursuant to which each of them has agreed not to, for a period

of 60 days from the closing of the Transactions, offer, sell, transfer or otherwise dispose of our securities, subject to certain exceptions.

In addition, from the date of the Purchase Agreement until the date that is nine (9) months after the date of the Purchase Agreement,

upon any issuance by the Company or any of its subsidiaries of Common Stock, common stock equivalents for cash consideration, Indebtedness

(as defined in the Purchase Agreement) or a combination of units thereof for capital raising purposes other than an at-the-market offering

(a “Subsequent Financing”), the Purchasers shall have the right to participate in the Subsequent Financing in an amount up

to the percentage of such Purchaser’s participation in the Transactions on the same terms, conditions and price provided for in

the Subsequent Financing.

Capital LLC acted as the placement agent for the offering and received a cash fee of 9.0% of the aggregate gross proceeds paid to us

for the securities sold in the transactions and reimbursement of certain out-of-pocket expenses.

As additional compensation we issued

to WallachBeth Capital LLC a warrant (the “Placement Agent Warrant”) to purchase an aggregate of 32,000 shares of Common

Stock, such number of shares equal to two percent (2.0%) of the number of shares of Common Stock issued in the registered direct offering,

at an exercise price per share equal to $1.64, which is equal to the exercise price of the Common Warrants.

The Placement Agent Warrant

is exercisable via “cashless exercise” in certain circumstances.

also agreed to file a registration statement to register the resale of the Common Warrant Shares and the shares of Common Stock issuable

upon exercise of the Placement Agent Warrant (the “Placement Agent Warrant Shares”) within 30 days of the date of the Purchase

Agreement and to use commercially reasonable efforts to keep such registration statement effective at all times until no Purchaser owns

any Warrants or Warrant Shares and until the Placement Agent does not own the Placement Agent Warrant or any Placement Agent Warrant

We are also obligated to hold a stockholders’ meeting 90 days after the closing date and every three months thereafter

seeking approval of the exercise of the Common Warrants.

laboratory services, including CyPath© Lung, are performed at our wholly owned subsidiary PPLS which we acquired by purchasing the

assets of Village Oaks Pathology Services, P.A., a Texas professional association d/b/a Precision Pathology Services, that included the

CAP-accredited and CLIA-certified commercial laboratory it owned.

We now own and operate the clinical anatomic and clinical pathology

CyPath® Lung is offered for sale to physicians by PPLS.

our wholly owned subsidiary, OncoSelect® Therapeutics, LLC, we have conducted research that has led to discoveries and advancement

of novel cancer therapeutic approaches that specifically and selectively target cancer cells.

We expect to present our findings at conferences

and publish our research in the near future.

We intend to seek strategic partners to develop our therapeutic discoveries which could

result in broad-spectrum cancer treatments in the future.

and optimization of our platform technologies are conducted in laboratories at our wholly owned subsidiary, PPLS and leased laboratory space at The University of Texas at San Antonio.

Year Financial Highlights

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

● Consolidated

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.

Financial Developments

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.

and Private Offerings

February 26, 2025, pursuant to the terms of the February Inducement Agreement certain holders of existing warrants exercised for cash

(i) October Warrants to purchase an aggregate of up to 1,302,082 shares of Common Stock, at the reduced exercise price of $0.58 per share,

and (ii) August Warrants to purchase an aggregate of up to 1,136,391 shares of Common Stock, at the reduced exercise price of $0.58 per

We received aggregate gross proceeds of approximately $1.4 million, before deducting advisory fees and other expenses payable

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

the February Inducement Agreement, we issued unregistered common warrants (the “February Warrants”) to purchase an aggregate

of up to 2,926,166 shares of Common Stock (120% of the number of shares of Common Stock issuable upon exercise of the October Warrants

and August Warrants) to such holders.

agreed in the February Inducement Agreement to file a registration statement to register the resale of the shares of Common Stock (the

“February Warrant Shares”) issuable upon exercise of the February Warrants (the “Resale Registration Statement”)

as soon as practicable (and in any event within 45 calendar days following the date of the Inducement Agreement), and to use commercially

reasonable efforts to have the Resale Registration Statement declared effective by the SEC and to keep such registration statement effective

at all times until the Holders no longer own any February Warrants or February Warrant Shares.

October 21, 2024, we issued to certain institutional investors (i) in a

registered direct offering, 2,048,294 shares of our Common Stock, and (ii) in a concurrent private placement (the “October Private

Placement”), common warrants to purchase an aggregate of 2,662,782 shares of Common Stock, with an exercise price of $1.50, pursuant

to a securities purchase agreement, dated October 18, 2024, that we entered into with such institutional investors, and received aggregate

gross proceeds from the offerings of approximately $2.7 million, before deducting placement agent fees and other offering expenses.

common warrants issued in the October Private Placement became exercisable on December 20, 2024, the date that our stockholders approved

the issuance of the shares of Common Stock issuable upon exercise of such warrants, and expire on December 19, 2029.

date, we have devoted a substantial portion of our efforts and financial resources to the development of our diagnostic test, CyPath ®

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debt securities.

to the acquisition, Precision Pathology Services had licensed and developed CyPath ® Lung as an LDT for sale to physicians.

The license agreement provided that revenues from the sale would be split evenly between the Company and Village Oaks.

In the second

quarter of 2022, prior to the acquisition, we started to recognize revenue as part of a limited beta market testing program of the CyPath ®

We have never been profitable, and as of December 31, 2023, we had total working capital of $1.7 million and an accumulated

have never been profitable, and as of December 31, 2024, we had a working capital deficit of $0.4 million and an accumulated

deficit of approximately $53.6 million.

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continue the development of our diagnostic tests and advance our diagnostic tests through clinical trials;

however, we do expect revenue

to increase due to the acquisition.

We intend to license our therapeutic products for clinical development should animal and pre-clinical

studies prove successful.

however, we do expect

revenue to increase due to accelerating sales of CyPath ® Lung and cost-saving measures we recently instituted at

We intend to seek strategic partners for our therapeutic discoveries related to selective broad-spectrum cancer treatments

through pre-clinical and clinical development.

anticipate raising additional cash needed through the private or public sales of equity or debt securities, collaborative arrangements,

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Post-acquisition,

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

additional revenue streams have been generated starting September 19, 2023.

PPLS generates three sources of revenue:

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Pre-acquisition, bioAffinity Technologies’ revenue was generated

in three ways for pre-acquisition:

(1) royalties from the Company’s diagnostic test, CyPath ® Lung, (2) clinical

flow cytometry services provided to Village Oaks related to the Company’s CyPath ® Lung test, and (3) CyPath ®

in three ways:

(1) royalties from our diagnostic test, CyPath ® Lung, (2) clinical

flow cytometry services provided to Village Oaks related to CyPath ® Lung test, and (3) CyPath ®

Lung tests purchased by the U.S.

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Year Ended December 31,

Patient service

Patient service fees 1

Histology service fees

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Other revenues

Patient services fees includes direct billing for CyPath® Lung diagnostic test.

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

Total net revenue

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

ended December 31, 2024 and 2023, respectively.

Change in 2024

Operating expenses:

Direct costs and expenses

Research and development

Clinical development

Selling, general and

administrative

and amortization

Selling, general and administrative

Depreciation and amortization

Total operating expenses

expenses totaled $10.5 million and $4.0 million during 2023 and 2022, respectively.

expenses totaled $18.3 million and $10.5 million for the years ended December 31, 2024 and 2023, respectively.

The increase in operating expenses is the result

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Costs and Expenses

direct costs and expenses are primarily direct labor for pathology services, laboratory supplies and reagents, laboratory equipment and

allocated shared facilities.

Direct costs and expenses totaled $1.7 million and $467 during 2023 and 2022, respectively.

of approximately $1.7 million for 2023 compared to 2022 was primarily attributable to the laboratory operations of the newly acquired

Our direct costs and expenses are primarily direct labor for pathology

services, laboratory supplies and reagents, laboratory equipment and allocated shared facilities.

Direct costs and expenses totaled approximately

$6.0 million and $1.7 million during 2024 and 2023, respectively.

The increase of approximately $4.3 million, or 244%,

was primarily attributable to the laboratory operations of PPLS being owned for the full fiscal year 2024, compared to approximately 3.5

months in fiscal year 2023.

and Development

research and development expenses consist primarily of expenditures for lab operations, preclinical studies, compensation, and consulting

Research and development expenses totaled $1.5 million and $1.4 million during 2023 and 2022, respectively.

The increase of approximately

$89,000, or 6%, for 2023 compared to 2022 was primarily attributable to an increase in compensation costs and benefits as we added research

development expenses totaled approximately $257,000 and $146,000 during 2023 and 2022, respectively.

The increase of approximately $111,000,

or 76%, for 2023 compared to 2022 was primarily attributable to an increase in compensation costs and benefits as we added clinic development

research and development expenses consist primarily of expenditures for lab operations, preclinical studies, compensation, and

consulting costs.

Research and development expenses remained consistent year-over-year, totaling $1.5 million for the years ended

December 31, 2024 and 2023.

development expenses totaled $321,655 and $256,661 for the years ended

December 31, 2024 and 2023, respectively.

The increase of $64,994, or 25% was primarily attributable to an increase in compensation costs

and benefits as we added clinic development personnel.

General and Administrative

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tax, other professional services, and general operating expenses.

general and administrative expenses totaled approximately $6.8 million and $2.5 million during 2023 and 2022, respectively.

of approximately $4.3 million, or 174%, for 2023 compared to 2022, was primarily attributable to general and administration costs acquired

from PPLS ($820,000), accounting, legal, and professional fee costs associated with the acquisition of PPLS ($811,000), the accounting,

legal, and professional fee costs associated with the SEC filing of a registration statement on Form S-1 ($197,000), increase in stock-based

compensation ($486,000), increase in employee compensation ($838,000) as we added sales and administrative personnel, increase in branding

and marketing collateral ($391,000), increase in directors and officers (“D&O”) insurance ($290,000), increase in public

company-related expenses ($294,000) as well as an increase related to board compensation ($147,000), and other operational expenses.

Additionally, compensation increased due to additional personnel and support services to support the launch of sales of our diagnostic

test, CyPath ® Lung.

Selling, general and administrative expenses totaled approximately $9.9 million

and $6.8 million for the years ended December 31, 2024 and 2023, respectively.

The increase of approximately $3.1 million, or 46% was

primarily attributable to the laboratory operations of PPLS being owned for the full fiscal year 2024, compared to approximately 3.5 months

in fiscal year 2023.

Additionally, the increase was due to the expansion of sales efforts for CyPath ® Lung, partially offset

by a reduction in legal and professional fees.

Income (Expense)

Interest income (expense), net

$ (2,485,932 )

Change in 2024

Interest (expense) income, net

Other income (expense), net

Gain on extinguishment of debt

Loss on change in

fair value of convertible notes

Total other income

$ (4,140,596 )

income (expense) totaled approximately $57,210 and ($4.1) million for 2023 and 2022, respectively.

Total other (expense) income

Other net income (expense) totaled $129 and $(27,796) for the years ended

December 31, 2024 and 2023, respectively, an increase of approximately $28,000, or 100%.

The net other expense for the year ended December

31, 2023 related to the loss on the disposal of an asset and other non-operating costs.

The net other income for the year ended December

31, 2024 related to approximately a $9,000 gain on a sale of an asset and offset by property taxes.

income (expense)

had net interest income (expense) of approximately $85,000 and ($2.5) million for the years ended December 31, 2023 and 2022, respectively.

The current year amount related to approximately $120,000 interest earned from money market account partially offset by interest paid

in financing lease for laboratory equipment.

The favorable improvement is based on convertible notes being converted to common stock

in the prior year.

gain on change in fair value of convertible notes

loss on the change in fair value of convertible notes was $0 during 2023 compared to a loss of $1.9 million during 2022, respectively.

The prior year recognized the change in the fair value of convertible notes converted to stock, the reduction in the expected term, and

other assumptions during the reported periods.

had net interest (expense) income of approximately $(74,865) and $85,006 for the years ended December 31, 2024 and 2023,

respectively.

The prior year amount related to approximately $120,000 interest earned from money market account partially offset by

interest paid in financing lease for laboratory equipment.

The current year amount related to approximately $18,000 interest earned

from money market account offset by interest paid in financing lease for laboratory equipment.

and Capital Resources

date, we have funded our operations primarily through our IPO, exercise of warrants, and the sale of our equity and debt securities,

resulting in gross proceeds of approximately $36.8 million.

The Company has evaluated whether there are conditions and events that raise

substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date the consolidated

financial statements are issued.

date, we have funded our operations primarily through our IPO, exercise of warrants,

and the sale of our equity and debt securities, resulting in gross proceeds of approximately $42.7 million.

We have evaluated whether

there are conditions and events that raise substantial doubt about our ability to continue as a going concern for at least one year after

the date the consolidated financial statements are issued.

2025 Warrant Inducement

February 26, 2025, pursuant to the terms of the February Inducement Agreement certain holders of existing warrants exercised for cash

(i) October Warrants to purchase an aggregate of up to 1,302,082 shares of Common Stock, at the reduced exercise price of $0.58 per share,

and (ii) August Warrants to purchase an aggregate of up to 1,136,391 shares of Common Stock, at the reduced exercise price of $0.58 per

We received aggregate gross proceeds of approximately $1.4 million, before deducting advisory fees and other expenses payable

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

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

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

2024 Registered Direct Offering and Concurrent Private Placement

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.

2024 Warrant Inducement, Registered Director Offering and Concurrent Private Placement

August 5, 2024, pursuant to the terms of the August Inducement Agreement, certain holders of existing warrants, exercised for cash March

Warrants to purchase an aggregate of up to 1,041,667 shares of Common Stock, at the reduced exercise price of $1.25 per share.

aggregate gross proceeds of approximately $1.3 million, before deducting advisory fees and other expenses payable by us.

In consideration

of the immediate exercise of the March Warrants by the holders thereof in accordance with the August Inducement Agreement, we issued

unregistered common warrants to purchase an aggregate of up to 1,302,082 shares of Common Stock (120% of the number of shares of Common

Stock issuable upon exercise of the March Warrants) to such holders.

August 5, 2024, we also issued to an institutional investor (i) in a registered direct offering, 360,000 shares of Common Stock, and

(ii) in a concurrent private placement, warrants to purchase an aggregate of 450,000 shares of Common Stock, with an exercise price of

We received aggregate gross proceeds from the offerings of approximately $450,000, before deducting fees payable to the placement

agent and other estimated offering expenses.

March 2024 Registered Direct Offering and Concurrent

Private Placement

On March 8, 2024, we issued to certain investors, pursuant to a Securities

Purchase Agreement (1) 1,600,000 shares of Common Stock in a registered direct offering, and (2) warrants to purchase an aggregate

of 1,600,000 shares of Common Stock with an exercise price of $1.64, in a concurrent private placement.

The direct offering

resulted in gross proceeds of $2.5 million.

have incurred losses since our inception in 2014 as a result of significant expenditures for operations and research and development

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During 2024 and 2023,

2022, we had net losses of $7.9 million and $8.2 million, respectively, and we expect to incur substantial additional losses in

future periods.

we had net losses of $9.0 million and $7.9 million, respectively, and we expect to incur substantial additional losses in future periods.

We have an accumulated deficit of approximately $53.6 million as of December 31, 2024.

Based on the Company’s

current expected level of operating expenditures and the cash on hand of approximately $2.7 million at the time of this filing,

management concludes that there is substantial doubt about the Company’s ability to continue as a going concern for a period

of at least twelve (12) months subsequent to the issuance of the accompanying consolidated financial statements.

Cash and cash

equivalents were approximately $2.8 million as of December 31, 2023 which does not take into account the gross proceeds of $2.5

million that we received in March 2024.

At the time of this filing, cash is expected to be sufficient through September 2024.

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

Based on our current expected level of operating expenditures and the cash

on hand of approximately $390 thousand at the time of this filing, management concludes that there is substantial doubt about our ability

to continue as a going concern for a period of at least twelve (12) months subsequent to the issuance of the accompanying consolidated

financial statements.

Without funding from the proceeds of a capital raise or strategic relationship or grant, management anticipates

that our cash resources are sufficient to continue operations through April 2025.

Cash and cash equivalents were approximately

$1.1 million as of December 31, 2024, which does not take into account the gross proceeds of $1.4 million that we received in February

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

relationships or grants, or through exercised outstanding warrants to support our future operations.

Our business plan includes

expansion for our commercialization efforts which will require additional funding.

If we are unable to improve our liquidity

position, we may not be able to continue as a going concern.

Our ability to continue as a going concern is dependent upon our

ability to generate revenue and raise capital from financing transactions.

There can be no assurance that we will be successful in

accomplishing these objectives.

Our business plan includes expansion

for our commercialization efforts which will require additional funding.

If we are unable to improve our liquidity position, we may not

be able to continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to generate revenue

and raise capital from financing transactions.

There can be no assurance that we will be successful in accomplishing these objectives.

following information reflects cash flows for the years presented:

Cash and cash equivalents at

beginning of year

Net cash used in operating

Net cash used in investing

cash provided (used) by financing activities

Cash and cash equivalents

at end of year

Cash and cash equivalents at beginning of year

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Cash and cash equivalents at end of year

Cash Used in Operating Activities

cash used in operating activities was approximately $7.3 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively.

The increase of approximately $1.9 million in cash used by operations during the year ended December 31, 2023, compared to 2022, was

primarily attributable to prior year recognizing approximately $1.9 million in fair value adjustments on convertible notes payable.

The increase of approximately $1.3 million

in cash used by operations was primarily attributable to the laboratory operations

of PPLS being owned for the full fiscal year 2024, compared to approximately 3.5 months in fiscal year 2023.

Additionally, the increase

was due to the expansion of sales efforts for CyPath ® Lung.

Cash Used in Investing Activities

Company used approximately $2.2 million in investing activities in 2023, compared to $0.2 million used for the year ended December 31,

The increase in cash used in investing activities in 2023, compared to 2022, is attributable to the acquisition of PPLS.

We used approximately $79,000 in investing activities for the year ended December

31, 2024, compared to $2.2 million used for the year ended December 31, 2023.

The significant decrease of $1.4 million in cash used in

investing activities was primarily due to equipment purchases in the current year, and the investing activities in the prior year related

to the acquisition of PPLS.

Cash Provided by Financing Activities

the year ended December 31, 2023, net cash used by financing activities was $345,000 as compared to net cash proceeds of $14.3 million

During the year ended December 31, 2022, net cash provided by financing activities was $14.3 million primarily due to net

proceeds of approximately $6.0 million from issuance of Common Stock in our IPO, as well as proceeds of approximately $7.8 million from

the exercise of warrants and options.

the year ended December 31, 2024, net cash provided by financing activities was $5.5 million as compared to net cash

used in financing activities of $0.3 million during 2023, representing an increase of approximately $5.9 million.

During the year ended December 31, 2024, net cash provided by financing activities

was primarily due to net proceeds of approximately $5.8 million from issuance of Common Stock and, option and warrant exercises,

partially offset by financing payments.

Accounting Estimates

preparation of financial statements in conformity with GAAP in the United States requires management to make significant judgments and

preparation of financial statements in conformity with GAAP in the U.S.

requires management to make significant judgments and

estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date

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To be able to report timely net revenues for the period, estimates are used for a portion of uncollected balances.

These estimates

relate to 3 rd party historical contractual discounts and adjustments (e.g.

insurance providers) and patient historical uncollectible

There can be a significant delay from the time a patient has been serviced to the invoicing of that service and then the net

proceeds collected.

Historical data is used to determine estimates for those “in service” revenues that have not been billed

or collected at the reporting period.

The Company follows a standard process, which considers historical denial

and collection experience and other factors (including the period of time that the receivables have been outstanding), to estimate contractual

allowances and implicit price concessions, recording adjustments in the current period as changes in estimates.

The process for estimating

revenues and the ultimate collection of accounts receivable involves significant judgment and estimation.

Fee Receivables and Considerations for Credit Losses

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research organizations (“CRO’s), hospitals, and independent laboratories.

the Company enters into contracts with its customers

for these enters.

The majority of the Company’s revenues stem from fees for services provided to patients, and thus, in those arrangements,

the patient is the customer, although the services may be requested by a physician on the patient’s behalf.

Furthermore, in addition

to its contracts with patients, the Company separately contracts with third-party payors (insurance companies and governmental payors),

who are typically responsible for all or the majority of the fees agreed upon for such services provided to patients.

Historically, material

amounts of gross charges are not collected due to various agreements with insurance companies, capped pricing levels for government payors

and uncollectible balances from individual payers.

To estimate these allowances of credit losses, the Company assesses the portfolio

risk segments and historical data on collection rates.

The majority of the Company’s revenues stem

from fees for services provided to patients, and thus, in those arrangements, the patient is the customer, although the services may

be requested by a physician on the patient’s behalf.

Furthermore, in addition to its contracts with patients, the Company separately

contracts with third-party payors (insurance companies and governmental payors), who are typically responsible for all or the majority

of the fees agreed upon for such services provided to patients.

Historically, material amounts of gross charges are not collected due

to various agreements with insurance companies, capped pricing levels for government payors and uncollectible balances from individual

To estimate these allowances of credit losses, the Company assesses the portfolio risk segments and historical data on collection

These estimated allowances offset patient revenues and accounts receivables.

Rate for Finance Leased Equipment

follow ASC 842, Leases , In February 2016, the FASB issued Topic 842, under which a lessee is required to recognize most leases

on its balance sheet.

The Company has elected to apply a third-party valuation increment borrowing rate (IBR) as the discount rate by

class of underlying assets when the rate is not implicit in the lease.

follow Leases (“ASC 842”).

In February 2016, the FASB issued Topic ASC 842, under which a lessee is required to recognize

most leases on its balance sheet.

The Company has elected to apply a third-party valuation incremental borrowing rate (“IBR”)

as the discount rate by class of underlying assets when the rate is not implicit in the lease.

follow ASC 718, Compensation – Stock Compensation , which requires the measurement and recognition of compensation expense

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income tax laws, which are administered by the Internal Revenue Service (“IRS”).

We follow ASC 740, Accounting

for Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes.

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary

differences are expected to be recovered or settled.

A valuation allowance is provided when it is more likely than not that some portion

or all of a deferred tax asset will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation

of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes

We follow ASC 740,

Accounting for Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial

statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled.

A valuation allowance is provided when it is more likely than not that

some portion or all of a deferred tax asset will not be realized.

The ultimate realization of deferred tax assets is dependent upon the

generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference

becomes deductible.

of Goodwill and Intangible Assets

indefinite-lived assets include Goodwill and Intangible Assets resulting from the acquisition of PPLS.

Goodwill represents the purchase

price in excess of fair values assigned to the underlying identifiable net assets of the acquired business.

Goodwill and Intangible Assets

are reviewed annually for impairment unless circumstances dictate the need for more frequent assessment.

performing impairment tests for our Goodwill in 2024, in accordance with ASC 350 - Intangibles – Goodwill and Other , we

opted to complete a quantitative assessment at the PPLS level as opposed to relying on a qualitative assessment as permitted in the

This quantitative assessment required that the estimated fair value of PPLS’ net assets, including Goodwill, be

calculated and compared to the carrying amount.

If that estimated fair value is in excess of the carrying amount, no impairment is

We performed this assessment as of December 31, 2024.

We estimated the fair value of the net assets tested using a

discounted cash flow model.

The income-based approach required significant judgment to estimate future cash flows, including revenue

growth inclusive of long-term growth rate assumptions and the discount rate.

Significant changes in our estimates and assumptions

could affect our fair value calculations.

Our estimate of fair value exceeded the carrying amount and therefore resulted in no

evaluation of our ability to continue as a going concern requires us to evaluate our future sources and uses of cash sufficient to fund

12 unchanged sentences

under this Item 7A.

Financial Statements and Supplementary Data.

information required by this item is presented at the end of this Annual Report beginning on page F-1 and is incorporated herein by reference.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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 7. Management’s Discussion and Analysis