Company: BIAF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024163
Chunk: 79

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 7
Chunk 79
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 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
payors. 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 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. 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