Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 302

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 2
Chunk 302
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 at June 30, 2025 and 2024 were 177,392,907 and 158,452,644, respectively. Because of the net loss for each
of the years ended June 30, 2025 and June 30, 2024, dilutive shares for both periods were excluded from the diluted EPS calculation, as
the effect of these potential shares of Common Stock is anti-dilutive. The Company had 13,669,140 and 17,146,315 potential shares of Common
Stock excluded from the diluted EPS calculation for the years ended June 30, 2025 and 2024, respectively.

Fair Value of Financial Instruments
– 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.

 Stock-Based Compensation
- The Company has granted stock options, restricted share units (“RSUs”) and warrants to certain employees, officers,
directors, and consultants. The Company accounts for options in accordance with the provisions of FASB ASC Topic 718, Compensation
– Stock Compensation. Stock based compensation costs for the vesting of options and RSUs granted to certain employees, officers,
directors, and consultants for the years ended June 30, 2025 and 2024 were $3,313,291 and $4,673,129, respectively.

The Company recognizes compensation
costs for stock option awards to employees, officers and directors based on their grant-date fair value. The value of each stock option
is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the
fair value of the stock options granted using the Black-Scholes option-pricing model are the expected term of the award, the underlying
stock price volatility, the risk-free interest rate, and the expected dividend yield. The Company accounts for forfeitures as they occur