Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 197

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 197
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 securities balance at June 30, 2025, was $387,851.

Insurance Receivable –
The Company recognizes insurance receivables associated with expected recoveries of costs incurred for litigation which is probable of
incurring a loss and for which it is probable the Company will receive coverage under its existing insurance policies. The Company records
any such recoveries on a gross basis and does not net such amounts against any related loss contingency accruals.

Property and Equipment -
Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and
equipment are capitalized and depreciated upon being placed in service. Expenditures for maintenance and repairs are charged to expense
as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the
assets, which range from four to ten years (see Note 5).

Intangible Assets - The
Company has both definite and indefinite life intangible assets.

Definite life intangible assets
relate to patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other Intangible Assets. Intangible assets are recorded
at cost. Patent costs capitalized consist of costs incurred to acquire the underlying patent. If it is determined that a patent will not
be issued, the related remaining capitalized patent costs are charged to expense. Definite life intangible assets are amortized on a straight-line
basis over their estimated useful life. The estimated useful life of patents is twenty years from the date of application.

Indefinite life intangible assets
include license agreements and goodwill acquired in a business combination. The Company accounts for indefinite life intangible assets
in accordance with ASC 350. License agreement costs represent the fair value of the license agreement on the date acquired and are tested
annually for impairment on June 30 or whenever events or changes in circumstances indicate the fair value of the license is less than
the carrying amount.

Goodwill - Goodwill is
not amortized but is evaluated for impairment annually as of June 30 or whenever events or changes in circumstances indicate the carrying
value of the reporting unit may be less than the fair value of the reporting unit.

    F-10

Impairment of Goodwill and
Indefinite Lived Intangible Assets – We test for goodwill impairment at the reporting unit level, which is one level below