Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 836

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7A
Chunk 836
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 30, 2025, and June 30, 2024, the Company has not experienced losses on these accounts and management believes the Company
is not exposed to significant risks on such accounts.

Investment in Equity Securities
– The Company accounts for investments in equity securities in accordance with ASC 321, Investments—Equity Securities.
Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in net income
or loss. Equity securities without readily determinable fair values are measured at cost, less impairment, if any, and adjusted for observable
price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company evaluates such investments
at each reporting period for impairment or other observable transactions that would require adjustment. On February 28, 2025, the Company
purchased $500,000 of equity securities. During the year ended June 30, 2025, the Company recorded a change in fair value of equity securities
for $112,149 (see Note 3). The investment in equity securities balance at June 30, 2025, was $387,851.

Insurance Receivable –
The Company recognizes insurance receivables associated with expected recoveries of costs incurred for litigation which is probable of
incurring a loss and for which it is probable the Company will receive coverage under its existing insurance policies. The Company records
any such recoveries on a gross basis and does not net such amounts against any related loss contingency accruals.

Property and Equipment -
Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and
equipment are capitalized and depreciated upon being placed in service. Expenditures for maintenance and repairs are charged to expense
as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the
assets, which range from four to ten years (see Note 5).

Intangible Assets - The
Company has both definite and indefinite life intangible assets.

Definite life intangible assets
relate to patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other Intangible Assets. Intangible assets are recorded
at cost. Patent costs capitalized consist of costs incurred to acquire the underlying patent. If it is determined that a patent will not
be issued