Company: BIAF
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010787
Chunk: 53

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 53
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 2023 acquisition. Additionally, the Company entered into another operating lease on September 1, 2024, with regard to
office space. The Company has operating leases consisting of office space with remaining lease terms ranging from 2.3 to 5.4 years as
of March 31, 2025. The Company has finance leases consisting of office and lab equipment with remaining lease terms ranging from approximately
1.1 to 2.8 years as of March 31, 2025, for which the Company has determined that it will use the equipment for a major part of its remaining
economic life.

The lease agreements generally do not provide an implicit
borrowing rate. Therefore, the Company used a benchmark approach as of the date of inception of the leases to derive an appropriate incremental
borrowing rate to discount remaining lease payments. The Company benchmarked itself against other companies of similar credit ratings
and comparable quality and derived imputed interest rates ranging from 7.43% to 8.07% for the lease term lengths.

Leases with an initial term of 12 months or less are
not recorded on the balance sheets. There are no material residual guarantees associated with any of the Company’s leases, and there
are no significant restrictions or covenants included in the Company’s lease agreements. Certain leases include variable payments
related to common area maintenance and property taxes, which are billed by the landlord, as is customary with these types of charges for
office space. The Company has not entered into any lease arrangements with related parties, and the Company is not the sublessor in any
arrangement.

The Company’s existing leases contain escalation
clauses and renewal options. The Company has evaluated several factors in assessing whether there is reasonable certainty that the Company
will exercise a contractual renewal option. For leases with renewal options that are reasonably certain to be exercised, the Company included
the renewal term in the total lease term used in calculating the right-of-use asset and lease liability.

    14

The components of lease expense, which are included
in selling, general and administrative expense and depreciation and amortization for the three months ended March 31, 2025 and 2024, are
as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE 

    Components of lease expense: 
    2025  
    2024 
  
    Amortization of right-of-use assets - finance lease 
    $96,243  
    $96,243