Company: BIAF
Filing Date: 2025-08-22
Form Type: DRS
Source: 0001641172-25-025247
Chunk: 35

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-08-22
Form: DRS
Chunk 35
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 components in proportion to their relative fair market values at the time the Pre-Funded Warrant is purchased by the U.S. Holder. This allocation of the purchase price for each Pre-Funded Warrant will establish a U.S. Holder’s initial tax basis for U.S. federal income tax purposes in the Pre-Funded Warrant and one Common Stock Purchase Warrant.

For this purpose, we will allocate $ [●]of the purchase price for the Pre-Funded Warrant and $ [●]of the purchase price for each Common Stock Purchase Warrant. However, the IRS will not be bound by such allocation of the purchase price for the Pre-Funded Warrant and the Common Stock Purchase Warrant, and therefore, the IRS or a U.S. court may not respect the allocation set forth above. Each U.S. Holder should consult its own tax advisor regarding the allocation of the purchase price for the Pre-Funded Warrants.

Treatment of Pre-Funded Warrants

Although it is not entirely free from doubt, we believe that a Pre-Funded Warrant should be treated as a separate class of our Common Shares for U.S. federal income tax purposes and a U.S. Holder of Pre-Funded Warrants should generally be taxed in the same manner as a holder of Common Stock except as described below. Accordingly, no gain or loss should be recognized upon the exercise of a Pre-Funded Warrant and, upon exercise, the holding period of a Pre-Funded Warrant should carry over to the Common Stock received. Similarly, the tax basis of the Pre-Funded Warrant should carry over to the Common Stock received upon exercise, increased by the exercise price of $0.007 per share. However, such characterization is not binding on the IRS, and the IRS may treat the Pre-Funded Warrants as warrants to acquire Common Shares. If so, the amount and character of a U.S. Holder’s gain with respect to an investment in Pre-Funded Warrants could change, and a U.S. Holder may not be entitled to make the “QEF Election” or “Mark-to-Market Election” described below with respect to the Pre-Funded Warrants to mitigate PFIC consequences in the event that the Company is classified as a PFIC. Accordingly, each U.S. Holder should consult its own tax advisor regarding the risks associated with the acquisition of a Pre-Funded Warrant pursuant to this offering (including potential alternative characterizations). The balance of this discussion generally assumes that the characterization described above is respected for U.S