Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-K/A
Source: 0001731122-25-000252
Chunk: 134

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-K/A
Chunk 134
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Following the fourth quarter of
each year, management performs its annual test of impairment of intangible assets by performing a assessment and determines if it is more
likely than not that the fair value of the asset is greater than or equal to the carrying value of the asset.

During the year ended June 30,
2023, the results of the assessment indicated that the carrying value of the licenses acquired as an IPR&D asset exceeded its fair
value, due to the changes in the projected economic benefits to be realized from these assets. Therefore, an impairment adjustment of
$18,960,000 was recorded for the year ended June 30, 2023.

During the year ended June 30,
2024, the results of the assessment indicated that the carrying value of the goodwill related to the RENB reporting unit exceeded its
fair value, due to the changes in the projected economic benefits to be realized from this reporting unit. 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. Therefore, an impairment adjustment of $11,640,000 was recorded for the year ended June
30, 2024.

NOTE 7 — LEASES

Operating Leases— On November 13, 2017, Renovaro entered into a Lease Agreement for a term of five years and two months from November 1, 2017, with Plaza Medical Office Building, LLC, a California limited liability company, as landlord, (the “Landlord”) pursuant to which the Company agreed to lease from the Landlord approximately 2,325 rentable square feet. The base rent increased by 3% each year and ranged from approximately $8,719 per month for the first year to $10,107 per month for the two months of the sixth year. The lease was terminated early without penalties or additional costs as of September 30, 2022, that released an accrual of $70,800 related to leasehold improvements that was not utilized.

On June 19, 2018, Renovaro entered into a Lease Agreement for a term of ten years from September 1, 2018, with Century City Medical Plaza Land Co., Inc., pursuant to which the Company agreed to lease approximately 2,453 rentable square feet. On February 20, 2019, Renovaro entered into an Addendum to the original Lease Agreement with an effective date of December