Company: BIAF
Filing Date: 2025-04-11
Form Type: S-1
Source: 0001641172-25-003892
Chunk: 105

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-04-11
Form: S-1
Chunk 105
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ors (insurance companies
and governmental payors), who are typically responsible for all or the majority of the fees agreed upon for such services provided to
patients. Historically, material amounts of gross charges are not collected due to various agreements with insurance companies, capped
pricing levels for government payors and uncollectible balances from individual payers. To estimate these allowances of credit losses,
the Company assesses the portfolio risk segments and historical data on collection rates. These estimated allowances offset patient revenues
and accounts receivables.

Discount Rate for Finance Leased Equipment

We follow Leases(“ASC 842”). In
February 2016, the FASB issued Topic ASC 842, under which a lessee is required to recognize most leases on its balance sheet. The Company
has elected to apply a third-party valuation incremental borrowing rate (“IBR”) as the discount rate by class of underlying
assets when the rate is not implicit in the lease.

Share-Based Compensation

We follow ASC 718, Compensation – Stock Compensation,
which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors,
and non-employees based on estimated fair values. We have used the Black-Scholes option pricing model to estimate grant date fair value
for all option grants. The assumptions we use in calculating the fair value of share-based payment awards represent management’s
best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As such, as we use different
assumptions based on a change in factors, our stock-based compensation expense could be materially different in the future.

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Accounting for Income Taxes

We are governed by U.S. income tax laws, which are
administered by the Internal Revenue Service (“IRS”). We follow ASC 740, Accounting for Income Taxes, which requires
an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be
realized. The ultimate realization of deferred tax assets is dependent upon the generation