Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q/A
Source: 0001731122-25-000250
Chunk: 26

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q/A
Chunk 26
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 (the “Subtenant”), whereby the Subtenant agreed to lease 3,554 square feet of space currently rented by the Company in Century City Medical Plaza as of June 25, 2022, for a period of 3.5 years with an option to renew for the remaining term of the lease that ends as of June 19, 2028. The base rent was $17,770 per month plus $750 towards utility fees that are part of the original lease agreement and would increase by 3% each year over the term of the sublease. The Company received a total of $57,022 on July 1, 2022 after execution of the sublease to cover the first month rent, utility fee and deposit. The first sublease payment began on August 1, 2022.

In accordance with ASC Topic 842,
the Company treated the sublease as a separate lease, as the Company was not relieved of the primary obligation under the original lease.
The Company continues to account for the Century City Medical Plaza lease as a lessee and in the same manner as prior to the commencement
date of the sublease. The Company accounted for the sublease as a lessor of the lease. The sublease was classified as an operating lease,
as it did not meet the criteria of a sales-type or direct financing lease.

On April 18, 2023, the Company entered into a sublease termination agreement with the Subtenant, whereby the Subtenant and the Company agreed to terminate the sublease effective as of April 30, 2023. The Subtenant agreed to pay the Company $ 139,460along with the security deposit of $ 35,540for a total termination fee of $ 175,000, to permit early termination of the sublease.

The Company recognized operating
income from the sublease on a straight-line basis in its statements of operations over the sublease term.

During the three and nine months
ended March 31, 2024 and 2023, the net operating lease expenses were as follows:

| Schedule of net operating 
 lease expenses            
 Operating Lease Expense   
 Sub lease Income          |     | For the Three Months Ended 
 March 31,                  
 2024                       | 106,790 
       — |     | 2023 |  99,099 
 (53,310 | ) |     | For the Nine Months Ended 
 March 31,                 
 2024                      | 236,455 
       — |     |