Company: BIAF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024163
Chunk: 78

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 7
Chunk 78
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 payments for loans and finance leases of $0.2 million.

Contractual
Obligations and Commitments

We
enter into contracts in the normal course of business with third-party contract organizations for clinical trials and other services
and products used for research and development and operating purposes. These contracts generally provide for termination following a
certain period after notice, and therefore we believe that any non-cancellable obligations under these agreements are not material.

Critical
Accounting Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires management to make significant judgments and estimates that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Management bases these significant judgments
and estimates on historical experience and other assumptions it believes 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 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