Company: BIAF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001840
Chunk: 1328

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 15
Chunk 1328
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 during the reporting period. Management bases
these significant judgments and estimates on historical experience and other assumptions it believes to be reasonable based upon information
presently available. Actual results could differ from those estimates under different assumptions, judgments, or conditions.

Principles
of Consolidation

The
Company’s consolidated financial statements reflect its financial statements, those of its wholly owned subsidiaries, and certain
variable interest entities where the Company is the primary beneficiary. The accompanying consolidated financial statements include all
the accounts of the Company, its wholly owned subsidiaries, OncoSelect® Therapeutics, LLC and PPLS, and the variable interest
entity, Village Oaks. All significant intercompany balances and transactions have been eliminated.

    F-7

In
determining whether the Company is the primary beneficiary of a variable interest entity, it applies a qualitative approach that determines
whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses
of, or the right to receive benefits from, the entity that could potentially be significant to that entity. The Company continuously
assesses whether it is the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions
may result in the Company consolidating or deconsolidating one or more of its collaborators or partners.

Business
Combination

On
September 18, 2023, the Company, in connection with the Asset Purchase Agreement it entered into with Village Oaks and Roby P. Joyce,
M.D., dated September 18, 2023, acquired substantially all the assets and assumed certain liabilities of Village Oaks in exchange for
total consideration of $3,500,000, which consists of: (1) $2.5 million in cash paid at closing and (2) 564,972 shares of the Company’s
Common Stock valued at $1 million. The assets purchased included a clinical pathology laboratory regulated by the Centers for Medicare
and Medicaid Services (“CMS”) and accredited by the College of American Pathologists (“CAP”) and certified under
the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”). The primary reason for the acquisition was control of the
laboratory in which CyPath® Lung is ordered and processed.

The
Company recognized goodwill of $1,404,000 arising from the acquisition. The acquisition is being accounted for as a business combination
in accordance with ASC 805. The Company has determined the fair values of the accounts receivable, accounts payable, and accrued