Company: BIAF
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023405
Chunk: 49

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 49
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 to be reasonable based upon information presently available.
Actual results could differ from those estimates under different assumptions, judgments, or conditions.

Patient
Fee Revenues

We
follow ASC 606, Revenue from Contracts with Customers, which requires revenue recognition in the period in which the service was
performed. To be able to report timely net revenues for the period, estimates are used for a portion of uncollected balances. The Company
follows a standard process, which considers historical denial and collection experience and other factors (including the period of time
that the receivables have been outstanding), to estimate contractual allowances and implicit price concessions, recording adjustments
in the current period as changes in estimates. The process for estimating revenues and the ultimate collection of accounts receivable
involves significant judgment and estimation.

Patient
Fee Receivables and Considerations for Credit Losses

We
follow accounting considerations of Current Expected Credit Loss (“CECL”) - Financial Instruments – Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments. With the acquisition of PPLS and control of Village Oaks, the
Company’s board-certified pathologists provide anatomic and clinical pathology services for patients and other customers. The Company’s
other customer types include contract research organizations (“CROs”), hospitals, and independent laboratories. The majority
of the Company’s revenues stem from fees for services provided to patients, and thus in those arrangements, the patient is the
customer, although the services may be requested by a physician on the patient’s behalf. Furthermore, in addition to its contracts
with patients, the Company separately contracts with third-party payors (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 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