Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 930

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 8
Chunk 930
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    Amortization 
     1,961,747  
     — 
  
    Section 174 R&E Capitalization 
     3,292,075  
     — 
  
    ROU Assets and Lease Liabilities 
     14,227  
     — 
  
    Section 481(a) Adjustment 
     (40,895) 
     — 
  
    R&D Tax Credits 
     1,718,415  
     — 
  
    Change in tax rate 
     —  
     — 
  
    Valuation allowance 
     (83,680,863) 
     (170,988,308)
  
    Total Deferred Tax Assets (Liabilities) 
    $—  
    $— 

    F-20

In accordance with prevailing
accounting guidance, the Company is required to recognize and disclose any income tax uncertainties. The guidance provides a two-step
approach to recognizing and measuring tax benefits and liabilities when realization of the tax position is uncertain. The first step is
to determine whether the tax position meets the more-likely-than-not condition for recognition, and the second step is to determine the
amount to be recognized based on the cumulative probability that exceeds 50%. The amount of and ultimate realization of the benefits from
the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings,
and other future events, the effects of which can be difficult to determine and can only be estimated. Management estimates that it is
more likely than not that the Company will not generate adequate net profits to use the deferred tax assets; and consequently, a valuation
allowance was recorded for all deferred tax assets.

A reconciliation of income tax
expense at the federal statutory rate to income tax expense at the Company’s effective rate is as follows for the years ended June
30, 2025 and 2024:

    Years ended June 30,

    2025 
    2024

    Computed tax at expected statutory rate 
    $(951,542) 
    $(24,066,011)
  
    Non-US income taxed at different rates 
     —  
     — 
  
    Non-deductible expenses / other items 
     (2,046,364) 
     — 
  
    Valuation allowance 
     2,999,380  
     24,066,011