Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 210

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 210
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able option periods when it is reasonably
certain that the Company would exercise such options. The Company’s leases have a remaining lease term of 26 and 28 months. As of
June 30, 2025, the weighted-average remaining term is 1.95 years.

Incremental borrowing rate
— The Company’s lease agreements do not provide an implicit rate. As the Company does not have any external borrowings for
comparable terms of its leases, the Company estimated the incremental borrowing rate based on the U.S. Treasury Yield Curve rate that
corresponds to the length of each lease. This rate is an estimate of what the Company would have to pay if borrowing on a collateralized
basis over a similar term in an amount equal to the lease payments in a similar economic environment. As of June 30, 2025, the weighted-average
discount rate is 4.66%.

    F-17

Lease and non-lease components
— In certain cases the Company is required to pay for certain additional charges for operating costs, including insurance, maintenance,
taxes, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square
footage. The Company determined that these costs are non-lease components, and they are not included in the calculation of the lease liabilities
because they are variable. Payments for these variable, non-lease components are considered variable lease costs and are recognized in
the period in which the costs are incurred.

Below are the lease commitments for the next 5 years:

    Schedule of lease commitments 

    Years Ending June 30 
    Lease Expense
  
    2026 
    $363,999 
  
    2027 
     358,326 
  
    Thereafter 
     56,621 
  
    Less imputed interest 
     (41,353)
  
    Total 
    $737,593 

NOTE 8 — DEBT

Convertible Notes Payable —

The January 2024 Note —
On January 12, 2024, the Company entered into Subscription Agreements with an investor to issue a Convertible Promissory Note for an aggregate
principal amount of $125,000 (the “January 2024 Note”). The Company received a total of $125,000 in gross proceeds. The
January 2024 Note bears an interest rate of 12% per annum and matured on December 29, 2024. The