Company: BIAF
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023405
Chunk: 21

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 21
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 with FASB ASC 606, the performance obligation was
complete for only 4 tests as of September 30, 2025. The performance obligation is deemed complete after samples have been collected,
processed, and analyzed and results communicated to patients. The unearned revenue balance amounted to $13,511 as
of September 30, 2025.

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 note payable, are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these instruments.

Warrants

The
Company issued liability classified warrants in connection with the issuance of the May 2025 warrants. The warrants were liability classified
as a result of certain terms in the May 2025 warrant agreement, and the terms were amended during September 2025 to trigger an equity
classification on the date of the reverse stock split. The Company uses a Black-Scholes model to estimate the fair value of the warrants.
Changes in the fair value of the warrants are recognized in “Change in fair value of warrants issued” for each reporting
period in the condensed consolidated statements of operations.

The
Company notes there were no liabilities as of September 30, 2025 and December 31, 2024. The Company remeasured the warrant liability
three times prior to converting the liability classification to equity classification. The Company initially recorded a warrant liability
of $2.9 million