Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 673

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 6
Chunk 673
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 estimated fair value of the reporting
unit based on the Company’s market capitalization. Management concluded the significant driver for the change in the economic benefits
was due to the Company’s continued inability to raise capital for the further development of the technologies within this reporting
unit. The Company recorded an impairment loss of $47,614,729 for the period ended September 30, 2024 and $122,804,700 for the period ended
June 30, 2025.

For indefinite life intangible
assets, such as IPR&D, on an annual basis on June 30th we determine the fair value of the asset and record an impairment loss, if
any, for the excess of the carrying value of the asset over its fair value. For the year ended June 30, 2024, the carrying value of the
IPR&D exceeded its fair value. Therefore, the Company recorded an impairment loss of $42,611,000 during the year ended June 30, 2024.
During the year ended June 30, 2025, the Company recorded no impairment loss related to IPR&D.

The carrying value of
IPR&D and goodwill at June 30, 2025, were 0
zero and $5,963,000, respectively.

 Impairment of Long-Lived
Assets - Long-lived assets, such as property and equipment and definite life intangible assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger
a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business
climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses
associated with the use of the asset; and current expectations that the asset will more likely than not be sold or disposed of significantly
before the end of its estimated useful life.

Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected
to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge
is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would
be separately presented in the balance sheet and reported at the lower