Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 848

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7A
Chunk 848
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 the Company acquired goodwill valued at $5,963,500, software valued at $143,000 and Trademark valued at $8,000.

Impairment

Following the fourth quarter of
each year, management performs its annual test of impairment of intangible assets by performing an assessment and determines if it is
more likely than not that the fair value of the asset is greater than or equal to the carrying value of the asset.

During the quarter ended September
30, 2024, 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. Therefore, an impairment adjustment of $47,614,729 was recorded
for the period ended September 30, 2024.

During the quarter 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. Therefore, an impairment adjustment of $122,804,700 was recorded for
the period ended June 30, 2025.

NOTE 7 — LEASES

Operating
Leases — On June 19, 2018, Lunai entered into a Lease Agreement for a term of ten years from September 1, 2018, with Century
City Medical Plaza Land Co., Inc., pursuant to which the Company agreed to lease approximately 2,453 rentable square feet. On February
20, 2019, Lunai entered into an Addendum to the original Lease Agreement with an effective date of December 1, 2019, where it expanded
the lease area to include another 1,101 square feet for a total rentable 3,554 square feet. The base rent increases by 3% each year, and
ranges from $17,770 per month for the first year to $23,186 per month for the tenth year. The equalized monthly lease payment for