BIAF — Q2 2026 Financial Report Analysis

CyPath Lung volume tripled; the cash didn't keep pace

bioAffinity Technologies sells one test of its own, CyPath® Lung, which looks for signs of lung cancer in a patient's coughed-up mucus (sputum) rather than through a biopsy. Its lab also runs ordinary pathology work for doctors. In the second quarter of 2026 (April to June), CyPath Lung tests delivered rose to 622 from 197 a year earlier, and CyPath revenue rose 210% to about $474,000. Total revenue grew 19% to $1.51 million. But operating costs grew faster, the operating loss widened 33% to $3.33 million, and the company ended June with $2.4 million of cash, which it said on August 3 had fallen to $1.0 million, enough "through August 2026." It has kept going by selling more shares: a $3.2 million offering in June, a private placement in August, and a 1-for-15 reverse stock split in August to stay listed on Nasdaq.

At a glance

• 622 CyPath Lung tests in Q2, up from 197. The product is gaining doctors (ordering offices and clinics up 122%), but at about $760 of revenue per test it is still only 31% of company revenue.
• $3.2 million of operating cash burn in the quarter vs $1.5 million of revenue. The business spends roughly $3 for every $1 it brings in, and that gap got wider this quarter.
• Weighted shares outstanding up 6.5x in a year (5.23 million vs 0.80 million). That is why loss per share "improved" from $5.07 to $0.64 even though the operating loss got bigger. Shareholders own a much smaller slice of the company than they did a year ago.

Key figures

Source: Form 10-Q for the quarter ended June 30, 2026. Share counts reflect the 1-for-30 reverse split of September 2025; they do not yet reflect the 1-for-15 split that took effect on August 21, 2026, after this filing.

Revenue: the product is growing, the rest of the lab is shrinking

The company reports three revenue streams from its lab subsidiary, Precision Pathology Laboratory Services (PPLS): patient service fees (which include CyPath Lung), histology fees (preparing tissue slides) and medical director fees. Patient service fees rose to $1.24 million from $0.94 million; histology fees fell to $248,000 from $309,000.

Taking CyPath Lung out, the rest of the business brought in roughly $1.04 million in Q2 vs about $1.12 million a year earlier, a decline of about 7%. Management attributes the drag to its March 2025 decision to stop "certain unprofitable pathology services." Over the first six months, that cutback outweighed CyPath's growth: half-year revenue fell 8% to $2.86 million, even though CyPath revenue rose 159% to $835,000 on about 1,100 tests (vs about 400).

Revenue per CyPath test was about $762 in Q2 (474,000 / 622), close to the roughly $777 of a year ago, so the growth is coming from volume, not from better pricing or insurer reimbursement. The company said that by July it had delivered more than 1,200 test reports in 2026, already more than in all of 2025.

Costs: a clinical trial and stock awards drove the increase

• Clinical development almost quadrupled because of the CyPath Lung longitudinal trial (a study that follows the same patients over time) that opened in March 2026. By June 30, 11 sites were active, nine of them Veterans Affairs and military medical centers, with funding support from the John P. Murtha Cancer Center Research Program.
• SG&A rose $644,000. Most of that is stock-based compensation, meaning pay given as shares or options, which costs no cash. Stock compensation booked in general and administrative expense was $767,000 vs $220,000 a year earlier, an increase of $547,000. Strip that out and SG&A rose only about $97,000, which management attributes to added sales staff and support.
• Direct costs rose just 7% while revenue rose 19%. Revenue minus direct costs was $423,000, or 28% of revenue, up from $253,000 (20%) a year ago. That is the one sign that more CyPath volume is starting to cover the lab's fixed costs.

What the headline numbers hide

The smaller net loss is a comparison effect, not progress. Net loss narrowed to $3.37 million from $4.06 million only because Q2 2025 carried about $1.55 million of non-operating charges tied to its May 2025 share offering: a $1.06 million loss from revaluing warrants (rights to buy shares at a set price) and $483,000 of other expense, which management attributes mostly to offering costs. Neither repeated this year. At the operating level, where the real business sits, the loss widened by $819,000.

Loss per share is not a usable trend. It fell from $5.07 to $0.64 because the average share count went from 0.80 million to 5.23 million. The share count is the reason, not better results.

Cash burn is bigger than the accounting loss once stock pay is excluded, and receivables are growing. Operating cash outflow was $6.43 million in the first half ($3.23 million in Q1 and $3.20 million in Q2), compared with a half-year net loss of $7.00 million that included $0.80 million of non-cash stock compensation. Part of the gap is that money owed by insurers and patients (accounts receivable) rose 65% to $895,000 from $542,000 at year end, even as half-year revenue fell 8%. For a lab that bills insurers, receivables growing faster than sales can mean slower collections on a newer test. The 10-Q notes that revenue includes estimates for amounts not yet collected.

"Going concern" doubt is explicit. A going-concern warning means management and its auditors are not confident the company has enough money to keep operating for the next 12 months without new funding. The 10-Q says there is "substantial doubt" about the company's ability to continue for at least 12 months, and that current cash plus expected revenue "will not be sufficient to support our operations through August 2026." The accumulated deficit, all losses since the company was founded in 2014, stands at $75.6 million.

Every share sold makes existing holdings smaller. Common shares outstanding went from 4.50 million at December 31 to 6.78 million at June 30 (+51%), mainly from the June 16 offering: 1,040,000 shares at $0.80 and 2,960,000 pre-funded warrants (shares bought in advance that can be claimed at a nominal price) at $0.793, for $3.2 million gross and $2.69 million net after $511,000 of fees. Of those pre-funded warrants, 1,000,000 were exercised by June 30 and another 1,180,000 in July and August. After the quarter, an August 14 private placement sold pre-funded warrants for 8,462,027 shares at $0.4657, plus Series A and Series B warrants for another 8,462,027 shares each at $0.4727, for about $3.6 million net (all pre-split numbers). That deal alone gave the buyer rights to more shares than the roughly 8.1 million outstanding after the summer exercises, before counting the 16.9 million warrant shares. The Series A and B warrants can only be exercised once stockholders approve them.

Listing risk

On July 30 Nasdaq notified the company that its share price had closed below $1.00 for 30 business days in a row. Because the company had already done a 1-for-30 reverse split in September 2025, it did not get the usual 180-day period to fix this, so it requested a hearing to appeal. On August 20 it announced a 1-for-15 reverse split, effective August 21, which it said was "primarily intended" to regain compliance with the minimum price rule. That makes two reverse splits in under a year, which in total turn every 450 original shares into one. After the split, the reported Q2 loss of $0.64 per share works out to roughly $9.60 per post-split share.

Takeaway: CyPath Lung is gaining real traction: test volume tripled and the number of ordering practices more than doubled. But each quarter burns about $3.2 million of cash on $1.5 million of revenue, and the company is funding the gap by selling heavily discounted shares and warrants. Two reverse splits in eleven months show how much ownership has been diluted. Higher test volume does not improve the per-share picture unless the company stops needing to raise money.

What to watch next

• How long the cash lasts. The company had $1.0 million on August 3 and raised about $3.6 million net on August 14. If it keeps spending about $1.07 million a month, as it did in Q2, that covers roughly three to four months. So another financing, or exercise of the August warrants after stockholder approval, is likely by the end of 2026 unless spending is cut. The 10-Q gives no guidance on when the company could break even.
• Whether CyPath volume keeps compounding. Tests went from about 400 in the first half of 2025 to about 1,100 in the first half of 2026. CyPath revenue needs to grow severalfold from about $1.9 million a year (Q2 run rate) before it could cover today's roughly $19 million a year of operating costs.
• Revenue per test and collections. Watch whether revenue stays near $760 per test and whether receivables stop outgrowing revenue. Either would show insurers are paying reliably.
• Clinical trial progress. Enrollment at the 11 sites, mostly VA and military, will provide the data the company needs to make a broader case to doctors and insurers.
• Nasdaq listing. Whether the August reverse split keeps the share price above $1.00 long enough for Nasdaq to confirm the company is back in compliance.
• Pipeline news. The asthma and COPD inflammation tests (with a July 2026 collaboration with proteomics company Pictor) and the preclinical skin-cancer siRNA program are early-stage. Neither produces revenue, and the R&D budget for both is small ($0.36 million in the quarter).

This is bioAffinity's first report on this site, so there is no earlier outlook to check against.