Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 198

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 198
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 the
operating segment level. Our detailed impairment testing involves comparing the fair value of each reporting unit to its carrying value,
including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit
and is based on discounted cash flows or relative market-based approaches. If the carrying value of the reporting unit exceeds its fair
value, we record an impairment loss for such excess.

During the year ended June 30, 2025, the results of the assessment indicated that
the carrying value of the RENC reporting unit exceeded its fair value, due to the decline in the estimated fair value of the reporting
unit based on the Company’s market capitalization. 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. The Company recorded an impairment loss of $47,614,729 for the period ended September 30, 2024 and $122,804,700 for the period ended
June 30, 2025.

For indefinite life intangible
assets, such as IPR&D, on an annual basis on June 30th we determine the fair value of the asset and record an impairment loss, if
any, for the excess of the carrying value of the asset over its fair value. For the year ended June 30, 2024, 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