Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 844

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7A
Chunk 844
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 key inputs
to the model are all contractual or observable with the exception being volatility, which is computed based on the volatility of the Company’s
underlying stock. The key inputs to valuing the contingent consideration liability as of June 30, 2025, were:

    Schedule of key input to valuing the
contingent consideration liability  

    Stock Price 
    $0.29 
  
    Exercise Price 
     $0.53 - $1.92 
  
    Volatility 
     116% - 141% 
  
    Risk Free Rate 
     3.61% - 4.02% 
  
    Expected Dividends 
     0%
  
    Discount Rate (Monte-Carlo model only) 
     0%
  
    Expected Term (years) 
     2.70 – 8.38 

At initial recognition of the contingent consideration,
the inputs were:

    Stock Price 
    $1.92 
  
    Exercise Price 
     $0.46 - $4.50 
  
    Volatility 
     107% - 133%  
  
    Risk Free Rate 
     4.22% - 5.14% 
  
    Expected Dividends 
     0%
  
    Discount Rate (Monte-Carlo model only) 
     12%
  
    Expected Term (years) 
     0.56 – 9.88 

    F-14

The following table sets forth the Level 3 liability
at June 30, 2025, which is recorded on the consolidated balance sheet at fair value on a recurring basis. As required, this liability
is classified based on the lowest level of input that is significant to the fair value measurement.

The roll forward of contingent consideration liability
is as follows:

    Schedule of fair value measurement on recurring basis 

    Fair Value Measurements at Reporting Date Using

    Quoted Prices in  Active Markets for Identical Assets Inputs 
    Significant Other  Observable Inputs 
    Significant Other Unobservable Inputs

    (Level 1) 
    (Level 2) 
    (Level 3)

    The roll forward of the contingent consideration liability is as follows: 

    Balance June 30, 2024 
     —  
     —  
    $12,310,000 
  
    Fair value adjustment 
     —  
     —  
     (11,680,000