Company: BIAF
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010787
Chunk: 11

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 7
Chunk 11
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ased Equipment

We follow ASC 842, Leases. In February 2016,
the FASB issued Topic ASC 842, under which a lessee is required to recognize most leases on its balance sheet. We have 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.

Stock-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. Since we use different
assumptions based on a change in factors, our stock-based compensation expense could be materially different in the future.

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 of future taxable income and the reversal of
deferred tax liabilities during the period in which the related temporary difference becomes deductible.

22

Going Concern

Our evaluation of our ability to continue as a going
concern requires us to evaluate our future sources and uses of cash sufficient to fund our currently expected operations and research
and development activities one year from the date our consolidated financial statements are issued. We evaluate the probability associated
with each source and use of cash resources in making our going concern determination. The research and development of our diagnostic tests
and therapeutic products are inherently subject to uncertainty.

Off-B