BIAF

Business Context and Reporting Period

Company: Bioaffinity Technologies, Inc. (BIAF)
Filing Type: Form 8-K (Current Report)
Date of Report: October 17, 2024 (Event Date: October 18, 2024)
Reporting Period: This filing reports on a specific corporate event rather than a financial period. The Company is an emerging growth company incorporated in Delaware.

Key Financial Metrics and Capital Structure

This filing details a capital raise rather than operational financial performance. Key metrics include:

• Offering Type: Registered Direct Offering and Concurrent Private Placement.
• Common Stock Issued: 2,048,294 shares.
• Common Warrants Issued: Warrants to purchase 2,662,782 shares.
• Warrant Exercise Price: $1.50 per share.
• Expected Gross Proceeds: Approximately $2,662,782 (excluding warrant exercise proceeds and before deducting fees).
• Placement Agent Fees: 8.0% cash fee of gross proceeds plus reimbursement of expenses up to $75,000.
• Placement Agent Warrants: Warrants to purchase 61,448 shares (approx. 3.0% of shares sold) at $1.50 exercise price.

Note: The filing text does not provide current revenue, profit, cash flow, margins, or debt levels.

Material Changes and Agreements

The Company entered into a Securities Purchase Agreement with institutional investors on October 18, 2024. Material terms include:

• Closing Date: Expected October 21, 2024.
• Lock-Up Agreements: Officers and directors are restricted from selling securities for 60 days post-closing.
• Market Stand-Off: The Company cannot issue new equity or enter Variable Rate Transactions for 45 days (equity) to 12 months (variable rate) post-closing, with exceptions for "at the market" offerings expiring after 6 months.
• By-Law Amendment: On October 17, 2024, the Board amended the By-Laws to set the quorum requirement for stockholder meetings at 34% of outstanding shares entitled to vote.
• Support Agreements: Stockholders holding over 16% of outstanding shares agreed to vote in favor of the warrant exercise proposal.

Outlook, Risks, and Contingencies

Warrant Exercise Conditions:

• Common Warrants are exercisable only after stockholder approval (the "Stockholder Approval Date").
• The Company must hold a special stockholder meeting within 90 days of the closing date to seek this approval.
• If approval is not obtained at the first meeting, the Company must call a meeting every six months thereafter until approval is obtained or warrants expire.
• Warrants expire on the fifth anniversary of the Stockholder Approval Date.

Contingencies and Risks:

• Registration Risk: If a resale registration statement is not effective six months post-closing, holders may elect cashless exercise.
• Fundamental Transaction: In the event of a merger or acquisition, warrant holders may require the Company to redeem warrants for cash based on Black Scholes Value, or receive consideration equivalent to common stockholders.
• Ownership Caps: Warrant exercise is limited if the holder would beneficially own more than 4.99% (or 9.99% upon election) of outstanding shares.

Investor Verification Checklist

• Verify the actual closing date and final gross proceeds received on or after October 21, 2024.
• Confirm the date and outcome of the special stockholder meeting required to approve the warrant exercise.
• Review the definitive Placement Agency Agreement and Securities Purchase Agreement (Exhibits 1.1 and 10.1) for specific covenants and exceptions.
• Monitor the Company's ability to maintain the effectiveness of the resale registration statement for the warrant shares.
• Assess the impact of the 34% quorum requirement on future corporate governance and stockholder meetings.