bioAffinity Technologies Announces Warrant Inducement for Aggregate Gross Proceeds of $1.4 Million

Rhea-AI Summary

bioAffinity Technologies (NASDAQ: BIAF) has secured warrant exercise agreements with three existing accredited investors, generating $1.4 million in gross proceeds. The agreement involves the exercise of existing warrants for 2,438,473 common stock shares at a reduced price of $0.58 per share (down from $1.50).

In exchange, investors will receive new unregistered warrants to purchase 2,926,168 shares (120% of exercised shares) at $0.85 per share. These new warrants will become exercisable upon stockholder approval and expire five years after approval. The transaction, with WallachBeth Capital as sole placement agent, is expected to close around February 26, 2025.

Positive

• Secured immediate $1.4M in gross proceeds
• Successful warrant exercise agreement with existing investors

Negative

• Reduced warrant exercise price from $1.50 to $0.58 indicates significant share price decline
• Additional dilution potential from new warrants for 2.93M shares
• New warrants priced at $0.85, below original $1.50 warrant price

Insights

Financial Analyst

bioAffinity Technologies' $1.4M Warrant Inducement: A Double-Edged Financing Strategy

bioAffinity Technologies has secured $1.4 million through warrant inducement agreements with three existing investors, representing approximately 11% of the company's $12.7 million market cap. This transaction provides immediate capital through the exercise of existing warrants at a significantly reduced price of $0.58 (down 61% from the original $1.50).

The structure of this deal reveals several critical insights about BIAF's current position. First, the company needed capital quickly but chose a path that avoided the regulatory hurdles of a traditional offering. The substantial warrant discount was necessary to entice investors, as the original $1.50 exercise price was nearly double the current share price of $0.78.

From a dilution perspective, this financing is significant. The immediate exercise creates 2.44 million new shares, with potential for an additional 2.93 million shares from the new warrants. For context, BIAF has approximately 16.3 million shares outstanding, meaning this transaction creates immediate dilution of about 15%, with potential total dilution exceeding 33% if all new warrants are eventually exercised.

The new warrants' exercise price of $0.85 sits at a 9% premium to the current share price, suggesting management believes the stock has upside potential. However, these warrants require stockholder approval before they're exercisable – a noteworthy contingency that could present execution risk.

For BIAF investors, this transaction presents mixed signals. The immediate capital infusion extends the company's runway, but the substantial discount and dilution suggest financing alternatives. Without disclosure of specific use of proceeds, it's difficult to assess whether this capital will drive value-creating initiatives or merely sustain operations.

This financing mechanism – while providing needed capital – comes at a significant cost to existing shareholders and indicates potential challenges in BIAF's ability to secure more favorable financing terms in the current market environment.

SAN ANTONIO--(BUSINESS WIRE)-- bioAffinity Technologies, Inc. (NASDAQ: BIAF and BIAFW) announced today it has entered into warrant exercise agreements with three existing accredited investors to exercise certain outstanding warrants to purchase an aggregate of 2,438,473 of the Company’s shares of common stock (the “Existing Warrants”). In consideration for the immediate exercise in full of the Existing Warrants for gross cash proceeds of approximately $1.4 million, the exercising holders will receive in a private placement new unregistered warrants (the “New Warrants”) to purchase up to an aggregate of 2,926,168 shares of common stock (equal to 120% of the shares of common stock issued in connection with the exercise of the Existing Warrants) with an exercise price of $0.85 per share. The New Warrants are initially exercisable on the date that stockholder approval of the exercise of the New Warrants is obtained and will expire five years from the date of such approval. In connection with the exercise of the Existing Warrants, the Company agreed to reduce the exercise price of the Existing Warrants from $1.50 to $0.58 per share. The exercise of the Existing Warrants and the issuance of the New Warrants are expected to occur on February 25, 2025.

The closing of the offering is expected to occur on or about February 26, 2025, subject to the satisfaction of customary closing conditions. The gross proceeds from the warrant inducement are expected to be approximately $1.4 million, excluding any proceeds that may be received upon the exercise of the New Warrants and before deducting placement agent fees and other offering expenses payable by the Company.

WallachBeth Capital is acting as sole placement agent for the for the warrant inducement transaction.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

About CyPath^® Lung

CyPath^® Lung uses advanced flow cytometry and artificial intelligence (AI) to identify cell populations in patient sputum that indicate malignancy. Automated data analysis helps determine if cancer is present or if the patient is cancer-free. CyPath^® Lung incorporates a fluorescent porphyrin, TCPP, that is preferentially taken up by cancer and cancer-related cells. Clinical study results demonstrated that CyPath^® Lung had 92% sensitivity, 87% specificity and 88% accuracy in detecting lung cancer in patients at high risk for the disease who had small lung nodules less than 20 millimeters. Diagnosing and treating early-stage cancer can improve outcomes and increase patient survival.

About bioAffinity Technologies, Inc.

bioAffinity Technologies, Inc. addresses the need for noninvasive diagnosis of early-stage cancer and diseases of the lung and broad-spectrum cancer treatments. The Company’s first product, CyPath^® Lung, is a noninvasive test that has shown high sensitivity, specificity and accuracy for the detection of early-stage lung cancer. CyPath^® Lung is marketed as a Laboratory Developed Test (LDT) by Precision Pathology Laboratory Services, a subsidiary of bioAffinity Technologies. For more information, visit www.bioaffinitytech.com and follow us on LinkedIn, Facebook and X.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the anticipated exercise of warrants, the anticipated gross proceeds from the Company’s offering of securities and the expected closing of the offering. Forward-looking statements can be identified by words such as “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “will” and similar expressions, or the negative of these words. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made and predictions as to future facts and conditions. Readers of this press release are cautioned not to place undue reliance on any forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to the Company’s ability to close the offering and risks and uncertainties included under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the SEC from time to time. The Company does not undertake any obligation to update any forward-looking statement relating to matters discussed in this press release, except as may be required by applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250225405355/en/

bioAffinity Technologies

Julie Anne Overton

Director of Communications

jao@bioaffinitytech.com

Investor Relations

Dave Gentry

RedChip Companies Inc.

1-800-RED-CHIP (733-2447) or 407-491-4498

BIAF@redchip.com

Source: bioAffinity Technologies, Inc.

FAQ

How much funding did BIAF raise through the warrant exercise agreement in 2025?

BIAF raised $1.4 million in gross proceeds through warrant exercise agreements with three accredited investors.

What is the exercise price of BIAF's new warrants issued in February 2025?

The new warrants have an exercise price of $0.85 per share.

How many new warrant shares did BIAF issue in the February 2025 agreement?

BIAF issued new warrants to purchase 2,926,168 shares, representing 120% of the exercised existing warrants.

What was the reduced exercise price for BIAF's existing warrants?

The exercise price of existing warrants was reduced from $1.50 to $0.58 per share.