Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q/A
Source: 0001731122-25-000254
Chunk: 10

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q/A
Chunk 10
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 to the February 13, 2014 acquisition of Renovaro Cube, (the “Acquisition”). As consideration for the Acquisition, the stockholders of Renovaro Cube received (i) 70,834,183 shares of Common Stock, (ii) the right to receive contingent shares pro rata upon the exercise of convertible notes, options, and warrants, which were outstanding at closing less (iii) an as of yet undefined discount of the number of shares to be issued as a result of any such exercise. The Company and the stockholders of Renovaro Cube have not determined or agreed on the amount of any such discount which may be applied towards future exercises. The contingent consideration liability was recorded at fair value of $20,557,500 at the time of the Acquisition and is subsequently remeasured to fair value at the end of each reporting period. As of September 30, 2024, there were 7,613,301 contingent shares issuable in connection with the Acquisition.

The fair value of the contingent consideration liability is estimated using
a Black-Scholes option-pricing model and a Monte-Carlo option pricing model. The key inputs to the model are all contractual or observable
with the exception being volatility, which is computed based on the volatility of the Company’s underlying stock. The key inputs
to valuing the contingent consideration liability as of September 30, 2024, were:

| Schedule of contingent consideration liability |     |   |               |   |
|:-----------------------------------------------|:----|:--|--------------:|:--|
| Stock Price                                    |     | $ |          0.48 |   |
| Exercise Price                                 |     |   | $0.46 - $8.23 |   |
| Volatility                                     |     |   |   113% - 134% |   |
| Risk Free Rate                                 |     |   | 3.52% - 4.31% |   |
| Expected Dividends                             |     |   |             0 | % |
| Expected Term (years)                          |     |   |   0.48 – 9.25 |   |

The following table sets forth
the Level 3 liability at September 30, 2024, which is recorded on the consolidated balance sheet at fair value on a recurring basis.
As required, this liability is classified based on the lowest level of input that is significant to the fair value measurement:

| Schedule of fair value measurement on recurring