Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 381

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 3
Chunk 381
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recurring basis. Fair value is defined as the exit price, representing the amount that would either be received
to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. There
were no Level 2, or 3 assets, nor any Level 1, or 2 liabilities measured at fair value on a recurring basis as of June 30, 2025.

Level 1 assets held as of June
30, 2025, consisted of an investment in equity securities related to an extension agreement entered on February 28, 2024.
The Company purchased 467,290 shares of common stock at a purchase price of $1.07 per share. The investment in equity securities was recorded
at a fair value of $500,000 at the time of purchase and is subsequently remeasured to fair value at the end of each reporting period.
As of June 30, 2025, the Company held 467,290 shares of common stock in connection with the investment in equity securities. 

Level 3 liabilities held as of June 30, 2025,
consisted of a contingent consideration liability related to the February 13, 2024, acquisition of Renovaro Cube (see Note 3).

Stock-Based Compensation -
The Company has granted stock options, restricted share units (“RSUs”) and warrants to certain employees, officers, directors,
and consultants. The Company accounts for options in accordance with the provisions of FASB ASC Topic 718, Compensation –
Stock Compensation. Stock based compensation costs for the vesting of options and RSUs granted to certain employees, officers,
directors, and consultants for the years ended June 30, 2025 and 2024 were $3,313,291 and $4,673,129, respectively (see Note 10 to the
Financial Statements).

The Company recognizes compensation
costs for stock option awards to employees, officers and directors based on their grant-date fair value. The value of each stock option
is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the
fair value of the stock options granted using the Black-Scholes option-pricing model are the expected term of the award, the underlying
stock price volatility, the risk-free interest rate, and the expected dividend yield