Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 838

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7A
Chunk 838
---
 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 of the carrying amount or fair value less costs to sell and would
no longer be depreciated. The depreciable basis of assets that are impaired and continue in use are their respective fair values. No impairment
of these assets was recorded during the year ended June 30, 2025 or 2024.

 Leases - In accordance
with ASC Topic 842, the Company determined the initial classification and measurement of its right-of-use assets and lease liabilities
at the lease commencement date and thereafter. The lease terms include any renewal options and termination options that the Company is
reasonably assured to exercise, if applicable. The present value of lease payments is determined by using the implicit interest rate in
the lease, if that rate is readily determinable; otherwise, the Company develops an incremental borrowing rate based on the