Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001731122-25-000258
Chunk: 12

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating
the impact this standard will have on its condensed consolidated financial statements.

The Company currently believes
there are no other issued and not yet effective accounting standards that are materially relevant to our condensed consolidated financial
statements.

NOTE 2 — GOING CONCERN

The Company’s consolidated
financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has incurred substantial
recurring losses from continuing operations, has used cash in the Company’s continuing operations, and is dependent on additional
financing to fund operations. The Company incurred a net loss of $7,252,394 and $51,464,429 for the three and six months ended December
31, 2024, respectively. As of December 31, 2024, the Company had cash and cash equivalents of $311,764 and an accumulated deficit of $383,919,510
and a working capital deficit of $26,898,493. These conditions raise substantial doubt about the Company’s ability to continue as
a going concern for one year after the date the financial statements are issued. The consolidated financial statements do not include
any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might
be necessary should the Company be unable to continue in existence.

Management has reduced overhead
and administrative costs by streamlining the organization to focus around the development and validation of its AI-driven cancer diagnostics
platform. The Company has tailored its workforce to focus on these activities. In addition, the Company intends to secure additional required
funding through equity or debt financing. However, there can be no assurance that the Company will be able to obtain any sources of funding.
Such additional funding may not be available or may not be available on reasonable terms, and, 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