Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-K/A
Source: 0001731122-25-000252
Chunk: 103

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-K/A
Chunk 103
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 Statements).

The Convertible Notes —On February 6, 2020, the Company issued two Convertible Notes (the “Convertible Notes”) to Paseco ApS (the “Holder”),
a Danish limited company and an existing stockholder of the Company, each with a face value amount of $600,000, convertible into shares
of Common Stock. The outstanding principal amount of the Convertible Notes was due and payable on February 6, 2023. Interest on the Convertible
Notes commenced accruing on the date of issuance at six percent (6%) per annum, computed on the basis of twelve 30-day months, and was
compounded monthly on the final day of each calendar month based upon the principal and all accrued and unpaid interest outstanding as
of such compound date. The interest was payable in cash on a semi-annual basis.

The conversion price was equal to $12.00 per share of Common Stock. The Holder did not exercise its conversion feature that expired on February 6, 2021. The Company evaluated the Convertible Notes in accordance with ASC 470-20 and identified that they each contain an embedded conversion feature that shall not be bifurcated from the host document (i.e., the Convertible Notes) as they are not deemed to be readily convertible into cash.

Effective December 30, 2022 (the
“Effective Date”), the Company amended and restated the Convertible Notes (the “Amended and Restated Secured Notes”).
Pursuant to the Amended and Restated Secured Notes, the due date was extended to February 28, 2024. The Amended and Restated Secured Notes
were convertible by the Holder if the Company consummated a public offering or private placement of Common Stock or securities convertible
into Common Stock. The conversion price was to be the price being paid by the investors in such offering. The interest rate was increased
to twelve percent (12%) per annum, which was prepaid by the Company in full on the date of amendment through the issuance of 198,439 shares
of the Company’s Common Stock: 29,419 shares for accrued interest up to the Effective Date and 169,020 shares related to the prepayment
of interest through the extension date of the Amended and Restated Secured Notes using the Common Stock closing market price on the Effective
Date, of $1.03. The obligations of the Company under the Amended and Restated Secured Notes were secured