Company: BIAF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001840
Chunk: 352

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 352
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Note
8. FAIR VALUE MEASUREMENTS

The
Company analyzes all financial instruments with features of both liabilities and equity under the FASB accounting standard for such instruments.
Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant
to the fair value measurement.

The
three levels of the hierarchy and the related inputs are as follows:

    Level
     
    Inputs
  
    1
     
    Unadjusted quoted prices in active markets for identical assets and liabilities.

    Unadjusted
quoted prices in active markets for similar assets and liabilities;
  
    2
     
    Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or

    Inputs other than quoted prices that are observable for the asset or liability.
  
    3
     
    Unobservable inputs for the asset or liability.

The
estimated fair value of certain financial instruments, including cash and cash equivalents, accounts and other receivables, prepaid and
other current assets, accounts payable, accrued expenses, and loan payable, are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these instruments.

Note
9. LEASES

The
Company has one operating lease for its real estate and office space for the CAP/CLIA laboratory, as well as multiple finance leases
for lab equipment in Texas that were acquired through the September 18, 2023 acquisition. Additionally, the Company entered into another
operating lease on September 1, 2024 with regard to office space. The Company has operating leases consisting of office space with remaining
lease terms ranging from 3.1 to 5.9 years as of December 31, 2024. The Company has finance leases consisting of office and lab equipment
with remaining lease terms ranging from approximately 1.25 to 3.0 years as of December 31, 2024, for which the Company has determined
that it will use the equipment for a major part of its remaining economic life.

The
lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach as of the date
of inception of the leases to derive an appropriate incremental borrowing rate to discount remaining lease payments. The Company benchmarked
itself against other companies of similar credit ratings and comparable quality and derived imputed interest rates ranging from 7.41%
to 8.03% for