Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-K/A
Source: 0001731122-25-000252
Chunk: 109

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-K/A
Chunk 109
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 Security Agreement”).

On June 12, 2023, the Holder notified
the Company that it wanted to apply the Interest Payment due to it towards the Company’s next private placement. Therefore, on June
26, 2023, in conjunction with the Company’s private placement, the Company issued (i) 567,588 shares of its Common Stock, par value
$0.0001 per share and (ii) warrants to purchase 283,794 shares of Common Stock at a purchase price of $0.53 per share and applied the
Interest Payment of $300,822 it owed to the Holder.

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On July 31, 2023, the Company and
the Holder agreed to amend the Promissory Note (the “Fourth Amendment”) to provide the Holder with limited conversion rights
in connection with the Company’s next private placement. Per the terms of the Fourth Amendment, the Holder could elect to convert
$2 million of the outstanding principal balance of the Promissory Note into the Units being offered in a private placement at the price
per Unit being paid by the investors in the private placement (the “Conversion Right”). On August 1, 2023, the Holder notified
the Company of its election to exercise the Conversion Right. As a result, $2 million of the outstanding principal balance of the Promissory
Note was converted into 280,505 Units at $7.13 per unit, comprised of an aggregate of (i) 280,505 shares of Series A Convertible Preferred
Stock of the Company and (ii) Warrants to purchase an aggregate of 1,402,525 shares of Common Stock with an exercise price of $0.65 per
share. The Series A Convertible Preferred Stock acquired by the Holder was initially convertible into 2,805,050 shares of Common Stock.
A $3 million principal balance remained outstanding under the Promissory Note after the foregoing conversion. The Company concluded that
in accordance with ASC 470-20-40-4, the difference between the fair value of the Preferred Shares and warrants and the carrying value
of the portion of the Note being converted should be recognized as an extinguishment. The extinguishment loss of $120,018 is recorded
in Other Income/Loss in the Statement of Operations. On November 30, 2023, the Company and the Holder agreed to amend the Promissory Note
(the “Fifth Amendment”) such that the Company