diff --git a/auto-instrumentation/+opentelemetry/+autoinstrument/AutoTrace.m b/auto-instrumentation/+opentelemetry/+autoinstrument/AutoTrace.m
index 7bb6353..e724cf8 100644
--- a/auto-instrumentation/+opentelemetry/+autoinstrument/AutoTrace.m
+++ b/auto-instrumentation/+opentelemetry/+autoinstrument/AutoTrace.m
@@ -1,7 +1,7 @@
 classdef AutoTrace < handle
     % Automatic instrumentation with OpenTelemetry tracing.
 
-    % Copyright 2024 The MathWorks, Inc.
+    % Copyright 2024-2025 The MathWorks, Inc.
 
     properties (SetAccess=private)
         StartFunction function_handle   % entry function
@@ -71,7 +71,8 @@
                 if isdeployed
                     % matlab.codetools.requiredFilesAndProducts is not
                     % deployable. Instead instrument all files under CTFROOT
-                    fileinfo = dir(fullfile(ctfroot, "**", "*.m"));
+                    fileinfo = [reshape(dir(fullfile(ctfroot, "**", "*.m")), [], 1); ...
+                        reshape(dir(fullfile(ctfroot, "**", "*.mlx")), [], 1)];
                     files = fullfile(string({fileinfo.folder}), string({fileinfo.name}));
 
                     % filter out internal files in the toolbox directory
@@ -79,6 +80,10 @@
                 else
                     %#exclude matlab.codetools.requiredFilesAndProducts
                     files = string(matlab.codetools.requiredFilesAndProducts(startfunname));
+                    
+                    % keep only .m and .mlx files. Filter out everything else
+                    [~,~,fext] = fileparts(files);
+                    files = files(ismember(fext, [".m" ".mlx"]));
                 end
             else
                 % only include the input file, not its dependencies
@@ -190,7 +195,7 @@ function handleError(obj, ME)
     mfiles = fullfile(string({mfileinfo.folder}), string({mfileinfo.name}));
     mlxfileinfo = dir(fullfile(f, "*.mlx"));
     mlxfiles = fullfile(string({mlxfileinfo.folder}), string({mlxfileinfo.name}));
-    f = [mfiles; mlxfiles];
+    f = [mfiles(:); mlxfiles(:)];
 else
     % file
     f = processFileInput(f);
diff --git a/test/autotrace_examples/matfile_example/matfile_example.m b/test/autotrace_examples/matfile_example/matfile_example.m
new file mode 100644
index 0000000..cacddaa
--- /dev/null
+++ b/test/autotrace_examples/matfile_example/matfile_example.m
@@ -0,0 +1,7 @@
+function y = matfile_example
+% Example code for testing auto instrumentation, which loads a .mat file
+
+% Copyright 2025 The MathWorks, Inc.
+
+load("mymagic", "x");
+y = sum(x);
\ No newline at end of file
diff --git a/test/autotrace_examples/matfile_example/mymagic.mat b/test/autotrace_examples/matfile_example/mymagic.mat
new file mode 100644
index 0000000..c8afb9a
Binary files /dev/null and b/test/autotrace_examples/matfile_example/mymagic.mat differ
diff --git a/test/autotrace_examples/two_subfolders_example/helper1/subfolder_helper1_1.m b/test/autotrace_examples/two_subfolders_example/helper1/subfolder_helper1_1.m
new file mode 100644
index 0000000..ad67add
--- /dev/null
+++ b/test/autotrace_examples/two_subfolders_example/helper1/subfolder_helper1_1.m
@@ -0,0 +1,6 @@
+function x = subfolder_helper1_1(x)
+% example code for testing auto instrumentation, helper function
+
+% Copyright 2025 The MathWorks, Inc.
+
+x = x * 2;
diff --git a/test/autotrace_examples/two_subfolders_example/helper1/subfolder_helper1_2.m b/test/autotrace_examples/two_subfolders_example/helper1/subfolder_helper1_2.m
new file mode 100644
index 0000000..ad453a6
--- /dev/null
+++ b/test/autotrace_examples/two_subfolders_example/helper1/subfolder_helper1_2.m
@@ -0,0 +1,6 @@
+function x = subfolder_helper1_2(x)
+% example code for testing auto instrumentation, helper function
+
+% Copyright 2025 The MathWorks, Inc.
+
+x = x * 3;
\ No newline at end of file
diff --git a/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_1.m b/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_1.m
new file mode 100644
index 0000000..28ff177
--- /dev/null
+++ b/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_1.m
@@ -0,0 +1,6 @@
+function x = subfolder_helper2_1(x)
+% example code for testing auto instrumentation, helper function
+
+% Copyright 2025 The MathWorks, Inc.
+
+x = x * 4;
diff --git a/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_2.m b/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_2.m
new file mode 100644
index 0000000..dde23fb
--- /dev/null
+++ b/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_2.m
@@ -0,0 +1,6 @@
+function x = subfolder_helper2_2(x)
+% example code for testing auto instrumentation, helper function
+
+% Copyright 2025 The MathWorks, Inc.
+
+x = x * 5;
\ No newline at end of file
diff --git a/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_3.m b/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_3.m
new file mode 100644
index 0000000..de2312b
--- /dev/null
+++ b/test/autotrace_examples/two_subfolders_example/helper2/subfolder_helper2_3.m
@@ -0,0 +1,6 @@
+function x = subfolder_helper2_3(x)
+% example code for testing auto instrumentation, helper function
+
+% Copyright 2025 The MathWorks, Inc.
+
+x = x * 5;
\ No newline at end of file
diff --git a/test/autotrace_examples/two_subfolders_example/two_subfolders_example.m b/test/autotrace_examples/two_subfolders_example/two_subfolders_example.m
new file mode 100644
index 0000000..4680c11
--- /dev/null
+++ b/test/autotrace_examples/two_subfolders_example/two_subfolders_example.m
@@ -0,0 +1,13 @@
+function x = two_subfolders_example
+% Example code for testing auto instrumentation, with helper functions
+% in a two subfolders
+
+% Copyright 2025 The MathWorks, Inc.
+
+x = 10;
+x = subfolder_helper1_1(x);
+x = subfolder_helper1_2(x);
+x = subfolder_helper2_1(x);
+x = subfolder_helper2_2(x);
+x = subfolder_helper2_3(x);
+
diff --git a/test/tautotrace.m b/test/tautotrace.m
index 3a74696..b1ecd0d 100644
--- a/test/tautotrace.m
+++ b/test/tautotrace.m
@@ -1,7 +1,7 @@
 classdef tautotrace < matlab.unittest.TestCase
     % tests for AutoTrace
 
-    % Copyright 2024 The MathWorks, Inc.
+    % Copyright 2024-2025 The MathWorks, Inc.
 
     properties
         OtelConfigFile
@@ -155,6 +155,35 @@ function testIncludeFolder(testCase)
             verifyEqual(testCase, results{2}.resourceSpans.scopeSpans.spans.parentSpanId, results{3}.resourceSpans.scopeSpans.spans.spanId);
         end
 
+        function testMultipleIncludeFolders(testCase)
+            % testMultipleIncludeFolders: specify multiple folders in AdditionalFiles
+           
+            % Add example folders to the path
+            examplefolder = fullfile(fileparts(mfilename('fullpath')), "autotrace_examples", "two_subfolders_example");
+            testCase.applyFixture(matlab.unittest.fixtures.PathFixture(examplefolder, ...
+                "IncludingSubfolders",true));
+
+            % set up AutoTrace, turn off automatic detection and specify 
+            % dependencies using their folder name
+            at = opentelemetry.autoinstrument.AutoTrace(@two_subfolders_example, ...
+                "AutoDetectFiles", false, "AdditionalFiles", fullfile(examplefolder, ["helper1" "helper2"]));
+
+            % run the example
+            [~] = beginTrace(at);
+
+            % perform test comparisons
+            results = readJsonResults(testCase);
+            verifyNumElements(testCase, results, 6);
+
+            % check span names
+            verifyEqual(testCase, string(results{1}.resourceSpans.scopeSpans.spans.name), "subfolder_helper1_1");
+            verifyEqual(testCase, string(results{2}.resourceSpans.scopeSpans.spans.name), "subfolder_helper1_2");
+            verifyEqual(testCase, string(results{3}.resourceSpans.scopeSpans.spans.name), "subfolder_helper2_1");
+            verifyEqual(testCase, string(results{4}.resourceSpans.scopeSpans.spans.name), "subfolder_helper2_2");
+            verifyEqual(testCase, string(results{5}.resourceSpans.scopeSpans.spans.name), "subfolder_helper2_3");
+            verifyEqual(testCase, string(results{6}.resourceSpans.scopeSpans.spans.name), "two_subfolders_example");
+        end
+
         function testExcludeFolder(testCase)
             % testExcludeFolder: specify a folder in ExcludeFiles
             
@@ -227,6 +256,28 @@ function testNonFileOptions(testCase)
             end
         end
 
+        function testIgnoreUnsupportedDependencies(testCase)
+            % testIgnoreUnsupportedDependencies: Check that File dependencies that are not
+            % .m or .mlx files are ignored. For example, .mat file.
+           
+            % Add example folders to the path
+            examplefolder = fullfile(fileparts(mfilename('fullpath')), "autotrace_examples", "matfile_example");
+            testCase.applyFixture(matlab.unittest.fixtures.PathFixture(examplefolder));
+
+            % set up AutoTrace
+            at = opentelemetry.autoinstrument.AutoTrace(@matfile_example);
+
+            % run the example
+            [~] = beginTrace(at);
+
+            % perform test comparisons
+            results = readJsonResults(testCase);
+            
+            % should only return 1 span
+            verifyNumElements(testCase, results, 1);
+            verifyEqual(testCase, string(results{1}.resourceSpans.scopeSpans.spans.name), "matfile_example");
+        end
+
         function testError(testCase)
             % testError: handling error situation