Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q/A
Source: 0001731122-25-000250
Chunk: 19

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q/A
Chunk 19
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, in the case of equity financing transactions, could result in significant additional dilution to our stockholders. If we do not obtain
required additional equity or debt funding, our cash resources will be depleted and we could be required to materially reduce or suspend
operations, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with
whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations,
we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their
investment in us.

Funding that we may receive during
the fiscal year 2024 is expected to be used to satisfy existing and future obligations and liabilities and working capital needs, to support
commercialization of our products, to conduct the clinical and regulatory work to develop our product candidates, and to begin building
working capital reserves.

NOTE 4 — FAIR VALUE MEASUREMENTS

The Company accounts for fair
value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”.
The authoritative guidance among other things, defines fair value, establishes a consistent framework for measuring fair value and expands
disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value
is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability
in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based
on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the
guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

| ● | Level 1. Observable inputs                                                   
 such as quoted prices in active markets for identical assets or liabilities; |

| ● | Level 2. Inputs, other                                                                       
 than quoted prices in active markets, that are observable either directly or indirectly; and |

| ● | Level 3. Unobservable inputs                                                                                   
 in which there is little or no market data, which require the reporting entity to develop its own assumptions. |

There were no Level 1, 2 or 3 assets, nor any Level 1 or 2 liabilities as of March 31, 2024.

Level 3 liabilities held as of
March