Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 179

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 179
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 by repayments of $870,073 under a
finance agreement.

Off-Balance Sheet Arrangements

As of June 30, 2025, and 2024,
we had no off-balance sheet arrangements. We are not aware of any material transactions which are not disclosed in our consolidated financial
statements.

Significant Accounting Policies and Critical Accounting Estimates

Our management’s discussion
and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. On an ongoing basis, we evaluate our
critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe
to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions
and conditions. Our most critical accounting estimates are detailed below, and our significant accounting policies are more fully described
in Note 1 of the accompanying consolidated financial statements.

Intangible Assets - The
Company has both definite and indefinite life intangible assets.

Definite life intangible assets
relate to patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other Intangible Assets. Intangible assets are recorded
at cost. Patent costs capitalized consist of costs incurred to acquire the underlying patent. If it is determined that a patent will not
be issued, the related remaining capitalized patent costs are charged to expense. Definite life intangible assets are amortized on a straight-line
basis over their estimated useful life. The estimated useful life of patents is twenty years from the date of application.

Indefinite life intangible assets
include license agreements and goodwill acquired in a business combination. The Company accounts for indefinite life intangible assets
in accordance with ASC 350. License agreement costs represent the fair value of the license agreement on the date acquired and are tested
annually for impairment.

Goodwill - Goodwill is
not amortized but is evaluated for impairment annually as of June 30, 2025 or whenever events or changes in circumstances indicate the
carrying value may not be recoverable.

Impair