bioAffinity Technologies(BIAF) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION This section presents the Company's unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2025 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows, along with their accompanying notes, for the periods ended March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This section provides a snapshot of the Company's financial position, detailing assets, liabilities, and equity as of March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights ($) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $444,706 | $1,105,291 | | Total current assets | $1,863,782 | $2,695,098 | | Total assets | $5,547,283 | $6,513,667 | | Total current liabilities | $3,415,409 | $3,104,905 | | Total liabilities | $4,107,879 | $3,911,631 | | Total stockholders' equity | $1,439,404 | $2,602,036 | - The company's cash and cash equivalents decreased by approximately 60% from $1.11 million at December 31, 2024, to $0.44 million at March 31, 2025[17] - Total stockholders' equity decreased by approximately 44.7% from $2.60 million at December 31, 2024, to $1.44 million at March 31, 2025[17] Unaudited Consolidated Statements of Operations This section outlines the Company's financial performance, presenting net revenue, operating expenses, and net loss for the three months ended March 31, 2025 and 2024 Unaudited Consolidated Statements of Operations Highlights (Three Months Ended March 31) ($) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------- | :------------ | :------------ | :------------ | :--------- | | Net Revenue | $1,853,597 | $2,406,391 | $(552,794) | (23.0)% | | Total operating expenses | $4,480,736 | $4,351,621 | $129,115 | 3.0% | | Loss from operations | $(2,627,139) | $(1,945,230) | $(681,909) | 35.1% | | Net loss | $(2,660,417) | $(1,961,815) | $(698,602) | 35.6% | | Net loss per common share | $(0.16) | $(0.20) | $0.04 | (20.0)% | - Net revenue decreased by 23% primarily due to strategic actions to discontinue unprofitable pathology services and focus on high-margin services like CyPath Lung[98][109] - Net loss increased by 35.6% to $2.66 million in Q1 2025, compared to $1.96 million in Q1 2024, driven by higher operating expenses and a decrease in net revenue[19][106] Unaudited Consolidated Statements of Changes in Stockholders' Equity This section details the changes in the Company's stockholders' equity, reflecting the impact of net loss, stock-based compensation, and warrant exercises for the three months ended March 31, 2025 Changes in Stockholders' Equity (Three Months Ended March 31, 2025) ($) | Item | Amount ($) | | :------------------------ | :--------- | | Balance at Dec 31, 2024 | 2,602,036 | | Stock-based compensation | 326,616 | | Exercise of stock warrants| 1,518,467 | | Offering costs | (347,298) | | Net loss | (2,660,417)| | Balance at Mar 31, 2025 | 1,439,404 | - Stockholders' equity decreased from $2.60 million at December 31, 2024, to $1.44 million at March 31, 2025, primarily due to a net loss of $2.66 million, partially offset by $1.52 million from warrant exercises and $0.33 million from stock-based compensation[21] Unaudited Consolidated Statements of Cash Flows This section presents the Company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024 Unaudited Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31) ($) | Cash Flow Activity | 2025 | 2024 | | :--------------------------- | :------------ | :------------ | | Net cash used in operating | $(1,641,775) | $(2,345,975) |\ | Net cash used in investing | $(50,786) | $(41,387) |\ | Net cash provided by financing | $1,031,976 | $2,018,957 |\ | Net decrease in cash | $(660,585) | $(368,405) |\ | Cash at end of period | $444,706 | $2,453,165 | - Net cash used in operating activities decreased by approximately $0.7 million, from $2.35 million in Q1 2024 to $1.64 million in Q1 2025, primarily due to changes in accounts receivables, accounts payable, and accrued expenses[23][126] - Cash provided by financing activities decreased from $2.02 million in Q1 2024 to $1.03 million in Q1 2025, mainly due to lower net proceeds from financing activities compared to the prior year[23][128] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements Note 1. NATURE OF OPERATIONS, ORGANIZATION, AND BASIS OF PRESENTATION This note describes the Company's business, its organizational structure, and the fundamental principles underlying the financial statement presentation - bioAffinity Technologies focuses on noninvasive diagnosis of early-stage lung cancer and other lung diseases using its proprietary platform, CyPath Lung, which utilizes flow cytometry and AI-driven automated data analysis[26] - The Company acquired Precision Pathology Laboratory Services, LLC (PPLS) in August 2023, which operates a CAP-accredited, CLIA-certified clinical pathology laboratory and offers CyPath Lung[27][93] - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern for at least 12 months due to significant losses and negative cash flows, with cash and cash equivalents of approximately $0.4 million at March 31, 2025[30] - A public offering completed on May 7, 2025, raised an additional $3.25 million in gross proceeds, but further capital will be needed to support future operations[30][86] Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the key accounting principles and methods used in the preparation of the Company's financial statements - The Company's revenue streams include patient service fees, histology service fees, and medical director fees, recognized upon completion of testing or service rendering[42] Net Revenue by Source (Three Months Ended March 31) ($) | Revenue Source | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Patient service fees | $1,570,382 | $2,149,049 | | Histology service fees | $263,754 | $237,972 | | Medical director fees | $16,588 | $16,058 | | Department of Defense observational studies | $— | $2,885 | | Other revenues | $2,873 | $427 | | Total net revenue | $1,853,597| $2,406,391| - Direct billing for CyPath Lung diagnostic test increased significantly from $45,000 in Q1 2024 to $169,000 in Q1 2025[44] Intangible Assets, Net (as of) ($) | Asset Category | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Goodwill | $1,404,486 | $1,404,486 | | Trade names and trademarks| $150,000 | $150,000 | | Customer relationships | $700,000 | $700,000 | | Accumulated amortization | $(89,444) | $(74,861) | | Intangible assets, net| $2,165,042 | $2,179,625 | Net Revenues and Operating Expenses by Segment (Three Months Ended March 31) ($) | Segment | 2025 Net Revenues | 2024 Net Revenues | 2025 Operating Expenses | 2024 Operating Expenses | | :------------------------ | :---------------- | :---------------- | :---------------------- | :---------------------- | | Diagnostic R&D | $— | $2,885 | $(505,739) | $(442,599) | | Laboratory services | $1,853,597 | $2,403,506 | $(2,267,656) | $(2,736,999) | | General corporate activities| N/A | N/A | $(1,707,341) | $(1,172,023) | Note 3. ACCOUNTS AND OTHER RECEIVABLES, NET This note details the composition of the Company's accounts and other receivables, net of allowances, as of the reporting dates Accounts and Other Receivables, Net (as of) ($) | Receivable Type | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Patient service fees | $744,859 | $915,488 | | Histology service fees | $189,904 | $190,648 | | Medical director fees | $11,600 | $5,194 | | Other receivables | $17,381 | $27,874 | | Total receivables, net| $963,744 | $1,139,204 | Note 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS This note provides a breakdown of the Company's prepaid expenses and other current assets as of the reporting dates Prepaid Expenses and Other Current Assets (as of) ($) | Asset Type | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Prepaid insurance | $160,756 | $248,364 | | Legal and professional | $15,787 | $27,448 | | Other | $240,007 | $147,183 | | Total prepaid assets | $416,550 | $422,995 | Note 5. PROPERTY AND EQUIPMENT, NET This note presents the Company's property and equipment, net of accumulated depreciation, as of the reporting dates Property and Equipment, Net (as of) ($) | Asset Category | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Lab equipment | $679,995 | $662,747 | | Computers and software | $81,433 | $81,433 | | Leasehold improvements | $19,353 | $19,353 | | Vehicles | $181,640 | $148,103 | | Less: accumulated depreciation | $(580,012) | $(536,251) | | Total property and equipment| $382,409 | $375,385 | - Depreciation expense for the three months ended March 31, 2025, was $43,763, an increase from $38,811 in the same period of 2024[58] Note 6. ACCRUED EXPENSES This note details the composition of the Company's accrued expenses as of the reporting dates Accrued Expenses (as of) ($) | Expense Type | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Compensation | $932,208 | $1,079,839 | | Legal and professional | $107,064 | $98,477 | | Clinical | $287,258 | $160,371 | | Other | $44,205 | $60,035 | | Total accrued expenses| $1,370,735 | $1,398,722 | Note 7. UNEARNED REVENUE This note explains the Company's unearned revenue balance related to an observational study with the U.S. Department of Defense - The Company had an unearned revenue balance of $24,404 as of March 31, 2025, and December 31, 2024, related to an observational study of CyPath Lung with the U.S. Department of Defense, where performance obligations for 30 units were not yet complete[60] Note 8. FAIR VALUE MEASUREMENTS This note describes the Company's methodology for fair value measurements of financial instruments using a three-level hierarchy - The Company classifies financial instruments into a three-level hierarchy based on the observability of inputs used in fair value measurement, with most short-term instruments carried at historical cost approximating fair value[61][62] Note 9. LEASES This note provides details on the Company's operating and finance leases, including their terms, liabilities, and discount rates - The Company holds operating leases for real estate and office space (2.3 to 5.4 years remaining) and finance leases for lab equipment (1.1 to 2.8 years remaining), with imputed interest rates ranging from 7.43% to 8.07%[63][64][65] Lease Liabilities and Terms (as of March 31, 2025) | Lease Type | Right-of-Use Asset, Net ($) | Current Liability ($) | Non-Current Liability ($) | Remaining Term (years) | Weighted-Average Discount Rate (%) | | :---------------------- | :---------------------- | :---------------- | :-------------------- | :--------------------- | :----------------------------- | | Operating leases | $431,746 | $130,342 | $308,415 | 3.60 | 7.38% | | Finance leases | $684,629 | $403,584 | $335,899 | 2.28 | 8.04% | Note 10. NOTES PAYABLE This note outlines the Company's notes payable, including vehicle loans and short-term financing for insurance policies - The Company has vehicle notes payable, including a new loan for $33,517 at 11.65% interest (January 2025) and an existing loan for $23,815 at 5.99% interest (March 2024)[70][71] - Short-term financing of approximately $260,000 was obtained in September 2024 for director and officer insurance policies, with a 6.7% fixed annual rate[72] Note 11. COMMITMENTS AND CONTINGENCIES This note addresses the Company's commitments and contingencies, including any material legal proceedings - The Company is not involved in any material pending legal proceedings[73] Note 12. COMMON STOCK This note provides information on the Company's authorized, issued, and outstanding common stock as of March 31, 2025 - The Company has 100,000,000 authorized shares of Common Stock ($0.007 par value) and 18,255,825 shares issued and outstanding as of March 31, 2025, including 430,474 unvested restricted stock awards[74] Note 13. STOCK-BASED COMPENSATION This note details the stock-based compensation expense and restricted stock award activity for the three months ended March 31, 2025 Stock-Based Compensation Expense (Three Months Ended March 31) ($) | Expense Category | 2025 | 2024 | | :------------------------ | :-------- | :-------- | | Research and development | $21,250 | $21,882 | | General and administrative| $305,366 | $260,731 | | Total expense | $326,616| $282,613| Restricted Stock Award Activity (as of March 31, 2025) (Number of RSAs) | Item | Number of RSAs | | :------------------------ | :------------- | | Balance at Dec 31, 2024 | 1,326,861 | | Granted | 253,398 | | Forfeited | (10,289) | | Balance at Mar 31, 2025| 1,569,970 | - During Q1 2025, the Company issued 243,109 restricted stock awards to employees, non-employees, and the board of directors, with vesting terms up to three years[79] Note 14. WARRANTS This note provides information on the Company's outstanding warrants, including exercise activity and new issuances - As of March 31, 2025, the Company had 12,873,602 warrants outstanding with a weighted average exercise price of $2.74, expiring through February 2030[80] - During Q1 2025, 2,438,473 warrants were exercised, generating $1,414,314 in proceeds, compared to no exercises in Q1 2024[80] - On February 25, 2025, a warrant inducement agreement led to the exercise of 2,438,473 existing warrants at a reduced price of $0.58 per share, generating approximately $1.4 million, and the issuance of 2,926,166 new unregistered warrants at an exercise price of $0.85[81][82][102] Note 15. SUBSEQUENT EVENTS This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On May 7, 2025, the Company completed a public offering, raising $3.25 million in gross proceeds through the sale of common stock (including pre-funded warrants) and accompanying warrants with an exercise price of $0.352 per share[86][99] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2025, compared to the same period in 2024, including an overview of the business, financial highlights, recent developments, and a discussion of liquidity and critical accounting estimates Company Overview This section introduces the Company's core business, its diagnostic platform, and its research initiatives - The Company develops noninvasive diagnostics for early-stage lung cancer and other lung diseases, utilizing flow cytometry and AI-driven machine learning for automated analysis[91] - CyPath Lung, the Company's diagnostic test, is offered through its wholly-owned subsidiary PPLS, which operates a CAP-accredited and CLIA-certified commercial laboratory[92][93] - Through OncoSelect Therapeutics, LLC, the Company also conducts research into novel cancer therapeutic approaches and intends to seek strategic partners for development[94] Current Year Financial Highlights This section summarizes key financial performance indicators and significant events for the three months ended March 31, 2025 - Consolidated revenue decreased by approximately 23% to $1.9 million for the three months ended March 31, 2025, compared to $2.4 million in the prior year, primarily due to strategic actions to discontinue unprofitable pathology services[98] - CyPath Lung testing revenue increased by approximately 275% to $169,000 for the three months ended March 31, 2025, up from $45,000 in the comparable period of 2024, driven by an increase of approximately 200 total test results delivered[98] - The Company raised approximately $1.4 million in gross proceeds from equity transactions to fund operating activities during the quarter[98] Recent Developments This section outlines significant events and strategic initiatives undertaken by the Company recently, impacting its operations and financial outlook - On May 8, 2025, the Company released 'CyPath Lung In Practice,' highlighting its clinical utility in accelerating diagnosis and preventing unnecessary invasive procedures[99] - On May 7, 2025, a public offering of securities was completed, generating $3.25 million in gross proceeds, consisting of common stock and warrants[99] - Effective April 1, 2025, the list price of CyPath Lung was increased from $1,900 to $2,900 to optimize reimbursement terms[100] - On March 7, 2025, the Company announced strategic actions to achieve $3 to $4 million in annual cost savings at PPLS by reducing labor costs, enhancing operational efficiency, and discontinuing unprofitable pathology services, while increasing resources for CyPath Lung sales[101] - On February 26, 2025, a warrant inducement agreement resulted in the exercise of 2,438,473 existing warrants for approximately $1.4 million in gross proceeds and the issuance of new unregistered common warrants[102] Financial This section discusses the Company's historical funding, current financial position, and future capital requirements - The Company has historically funded operations through private and public equity sales, with approximately $46.0 million in gross proceeds since inception[121] - As of March 31, 2025, the Company had cash and cash equivalents of $0.4 million, an accumulated deficit of approximately $56.3 million, and a working capital deficit of approximately $1.6 million[103][104] - Despite recent financings, current cash and anticipated revenue are expected to support operations only through August 2025, leading management to conclude there is substantial doubt about the Company's ability to continue as a going concern[103] - The Company anticipates needing to raise additional capital through equity or debt sales, collaborative arrangements, or grants to fund future operations and product development[105] Results of Operations This section analyzes the Company's financial performance, detailing net loss, revenue, and operating expenses for the reporting periods Net Loss This section reports the Company's net loss for the three months ended March 31, 2025, compared to the prior year - Net loss for the three months ended March 31, 2025, was approximately $2.7 million, an increase from approximately $2.0 million for the same period in 2024[106] Revenue This section provides a detailed breakdown and analysis of the Company's net revenue by source for the reporting periods Net Revenue Breakdown (Three Months Ended March 31) ($) | Revenue Source | 2025 | 2024 | Change ($) | Change (%) | | :---------------------------------- | :------------ | :------------ | :------------ | :--------- | | Patient service fees | $1,570,382 | $2,149,049 | $(578,667) | (26.9)% | | Histology service fees | $263,754 | $237,972 | $25,782 | 10.8% | | Medical director fees | $16,588 | $16,058 | $530 | 3.3% | | Department of Defense observational studies | $— | $2,885 | $(2,885) | (100.0)% | | Other revenues | $2,873 | $427 | $2,446 | 572.8% | | Total net revenue | $1,853,597| $2,406,391| $(552,794)| (23.0)%| - The decrease in total net revenue is primarily attributed to discontinuing certain unprofitable pathology services to focus on high-margin services like CyPath Lung[109] Operating Expenses This section analyzes the Company's operating expenses by category, highlighting changes and their underlying drivers Operating Expenses (Three Months Ended March 31) ($) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :------------ | :------------ | :--------- | | Direct costs and expenses | $1,367,860 | $1,573,441 | $(205,581) | (13)% | | Research and development | $367,386 | $393,639 | $(26,253) | (7)% | | Clinical development | $138,353 | $48,960 | $89,393 | 183% | | Selling, general and administrative | $2,452,549 | $2,185,944 | $266,605 | 12% | | Depreciation and amortization | $154,588 | $149,637 | $4,951 | 3% | | Total operating expenses | $4,480,736| $4,351,621| $129,115 | 3% | - Direct costs and expenses decreased by 13% due to strategic actions in March 2025 to streamline operations and reduce lab-related costs[111] - Clinical development expenses increased by 183% due to higher professional fees related to managing the pivotal clinical trial strategy[114] - Selling, general and administrative expenses increased by 12% due to additional personnel and support services to drive CyPath Lung sales growth[116] Other Income (Expense) This section details the Company's non-operating income and expenses, including interest and other miscellaneous items Other Income (Expense) (Three Months Ended March 31) ($) | Category | 2025 | 2024 | Change ($) | Change (%) | | :---------------------------- | :------------ | :------------ | :------------ | :--------- | | Interest (expense) income, net| $(14,493) | $(17,423) | $2,480 | (14)% | | Other income (expense), net | $(9,640) | $4,510 | $(14,150) | (314)% | | Total other (expense) income| $(24,583) | $(12,913) | $(11,670) | 90% | - Total other expense increased by 90% primarily due to a decrease in other income (expense) of $14,150, mainly attributable to property taxes[118][120] Liquidity, Capital Resources, and Going Concern This section assesses the Company's ability to meet its short-term and long-term obligations, its capital-raising efforts, and its going concern status - The Company has incurred significant losses since its inception in 2014, with net losses of $2.7 million and $2.0 million for the three months ended March 31, 2025 and 2024, respectively, and an accumulated deficit of approximately $56.3 million as of March 31, 2025[122] - Despite recent financings totaling $4.65 million in gross proceeds (February and May 2025), the Company's cash and anticipated revenue are only expected to support operations through August 2025[122][123] - Management concludes there is substantial doubt about the Company's ability to continue as a going concern for at least twelve months, necessitating further capital raises through equity, debt, or strategic relationships[123] Summary Statements of Cash Flows This section provides a summary of the Company's cash flow activities, categorized into operating, investing, and financing Net Cash Used in Operating Activities This section analyzes the cash flows generated or used by the Company's primary business operations - Net cash used in operating activities decreased by approximately $0.7 million to $1.6 million for the three months ended March 31, 2025, compared to $2.3 million in the prior year, primarily due to a decrease in patient accounts receivables and an increase in accounts payable and accrued expenses[126] Net Cash Used in Investing Activities This section details the cash flows related to the acquisition and disposal of long-term assets - Net cash used in investing activities was approximately $0.05 million for the three months ended March 31, 2025, mainly for the purchase of computer and laboratory equipment, a slight increase from $0.04 million in the prior year[127] Net Cash Provided by Financing Activities This section outlines the cash flows from debt and equity transactions, impacting the Company's capital structure - Net cash provided by financing activities decreased to approximately $1.0 million for the three months ended March 31, 2025, from $2.0 million in the prior year, primarily due to lower net proceeds from financing activities in February 2025 ($1.4 million) compared to March 2024 ($2.5 million)[128] Contractual Obligations and Commitments This section discusses the Company's contractual obligations and commitments, noting that non-cancelable obligations are not material - The Company's contracts with third-party organizations for clinical trials and other services generally include termination clauses, and thus, non-cancelable obligations are not considered material[129] Critical Accounting Estimates This section highlights the accounting estimates that require significant judgment and can materially impact the financial statements - Key accounting estimates include patient fee revenues (requiring judgment for contractual allowances and implicit price concessions), patient fee receivables and credit losses (assessing portfolio risk and historical collection data), discount rate for finance leased equipment (using a benchmarked incremental borrowing rate), stock-based compensation (using Black-Scholes model with management's best estimates), accounting for income taxes (asset and liability approach with valuation allowance assessment), and going concern evaluation (assessing future cash sources and uses)[130][131][132][133][134][135][137] Off-Balance Sheet Arrangements This section confirms the absence of off-balance sheet arrangements that could materially affect the Company's financial position - The Company does not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, and therefore had no off-balance sheet arrangements during the periods presented[138] Emerging Growth Company Status This section clarifies the Company's status as an emerging growth and smaller reporting company, detailing its reduced reporting requirements - The Company is classified as both an 'emerging growth company' and a 'smaller reporting company,' which subjects it to reduced public company reporting requirements under the Exchange Act[139] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a smaller reporting company, bioAffinity Technologies is not required to provide quantitative and qualitative disclosures about market risk - The Company is exempt from providing market risk disclosures under Item 305(e) of Regulation S-K due to its status as a smaller reporting company[140] ITEM 4. CONTROLS AND PROCEDURES. This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section reports on the effectiveness of the Company's disclosure controls and procedures as assessed by management - As of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective in ensuring timely and accurate reporting[141] Changes in Internal Control over Financial Reporting This section reports on any material changes in the Company's internal control over financial reporting during the quarter - There were no changes in the Company's internal control over financial reporting during the three months ended March 31, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[142] PART II OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and other disclosures ITEM 1. LEGAL PROCEEDINGS. This section states that the Company is not currently involved in any material legal proceedings - The Company has no material pending legal proceedings that are expected to have a material adverse impact on its financial position or results of operations[144] ITEM 1A. RISK FACTORS. This section updates the risk factors previously disclosed in the 2024 Form 10-K, emphasizing risks related to the Company's financial position, ability to obtain additional capital, Nasdaq listing compliance, and the concentration of common stock ownership by management - The Company's business plan relies heavily on its ability to obtain additional capital and financing, and failure to do so could lead to curtailment or cessation of operations[146][150] - There is substantial doubt about the Company's ability to continue as a going concern, requiring additional capital to fund operations beyond August 2025[150] - The Company is at risk of de-listing from The Nasdaq Capital Market due to not meeting the minimum bid price requirement and having stockholders' equity below the required $2.5 million[153][155] - Management collectively owns approximately 26% of the Company's voting power, which could influence corporate decisions and potentially deter changes of control[157] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. This section confirms that the Company did not engage in any unregistered sales of equity securities during the quarter ended March 31, 2025, beyond what was previously disclosed - No unregistered sales of equity securities occurred during the quarter ended March 31, 2025, other than those previously disclosed[159] ITEM 3. DEFAULTS UPON SENIOR SECURITIES. This section states that there are no defaults upon senior securities to report - This item is not applicable to the Company for the reporting period[160] ITEM 4. MINE SAFETY DISCLOSURE. This section indicates that mine safety disclosure is not applicable to the Company - This item is not applicable to the Company for the reporting period[161] ITEM 5. OTHER INFORMATION. This section reports on Rule 10b5-1 trading arrangements by directors and officers - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended March 31, 2025[162] ITEM 6. EXHIBITS. This section provides a list of exhibits filed as part of this Quarterly Report on Form 10-Q - The report includes various exhibits such as the Certificate of Incorporation, Amended and Restated Bylaws, forms of warrants, employment agreements, and certifications under the Sarbanes-Oxley Act[164] SIGNATURES This section contains the signatures of the Company's authorized officers, certifying the report - The report is signed by Maria Zannes, Chief Executive Officer, President, Founder, and Director, and J. Michael Edwards, Vice President and Chief Financial Officer, on May 15, 2025[168]