Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 474

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 4
Chunk 474
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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. The Company accounts for forfeitures as they occur.

The Company records stock-based
compensation for services received from non-employees in accordance with ASC 718, Compensation—Stock Compensation Non-Employees.
All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based
on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
Equity instruments issued to consultants and the cost of the services received as consideration are measured and recognized based on the
fair value of the equity instruments issued and are recognized over the consultants’ required service period, which is generally
the vesting period (see Note 10 to the Financial Statements).

The Company does not have sufficient
historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
Accordingly, the Company has elected to use the “simplified method” to estimate the expected term of its share-based awards.
The simplified method computes the expected term as the sum of the award’s vesting term plus the original contractual term divided
by two.

Recently Enacted Accounting Standards

For a description of recent accounting
standards, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see “Note
1: Recent Accounting Pronouncements” in the financial statements included elsewhere in this Annual Report.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Company is a smaller reporting company and is not
required to provide this information.

Item 8. Financial Statements and Supplementary
Data

63

Lunai Bioworks Inc. AND SUBSIDIARIES

Index to Consolidated Financial Statements 

Page 

Report of Independent Registered Public Accounting Firm (PCAOB ID:3627)
F-2

Consolidated Balance Sheets at June 30, 2025 and 2024
F-4

Consolidated Statements of Operations for the Years Ended