Annual Report for Fiscal Year Ending June 30, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements, and the related notes to those statements included elsewhere in this report. In addition to the historical financial information, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements.

Our Business

Lunai Bioworks Inc. operates through three subsidiaries, Renovaro Biosciences, Renovaro Cube and BioSymetrics Inc. Renovaro Cube refers to GediCube Intl. Ltd. and its wholly owned subsidiaries GediCube, B.V. and Grace Systems B.V., which were acquired on February 13, 2024. BioSymetrics Inc. refers to BioSymetrics Inc. and its wholly owned subsidiary BioSymetrics Corp., which were acquired on April 8, 2025.

Renovaro Biosciences is a biotechnology company intending, if the necessary funding is obtained, to develop advanced allogeneic cell and gene therapies to promote stronger immune system responses potentially for long-term or life-long cancer remission in some of the deadliest cancers. As a result of our acquisition of GEDi Cube Intl on February 13, 2024 and BioSymetrics Inc. on April 8, 2025, we have shifted the Company's primary focus and resources to the development of the GEDi Cube Intl and BioSymetrics Inc. technologies.

To date, our operations have been funded by sales of our securities and debt financing. We have never generated any sales revenue and we expect this to continue until our products are approved for marketing in the United States and/or Europe. Even if we are successful in having our products approved for sale in the United States and/or Europe, we cannot guarantee that a market for the products will develop. We may never be profitable.

Recent Developments

On September 2, 2025, the Court of Amsterdam (the "Court") declared bankrupt Gedi Cube B.V. ("Gedi"), an indirect subsidiary of Lunai Bioworks, Inc. ("Lunai"), and appointed Mr. M.M. Dellebeke as the receiver in the bankruptcy. Gedi filed a voluntary petition seeking a declaration of bankruptcy due to its inability to make payments as they became due. As a result of this, the Company determined that a material impairment of Gedi had occurred (see Note 6 to the financial statements).

On August 18, 2025, the Company issued Promissory Notes in the aggregate principal amount of $1,000,000. The Notes bear an interest rate of 18% per annum and mature on the 6-month anniversary of the Issue Date., (the "Maturity Date"). The Company is required to pay principal and interest on the Maturity Date.

From July 3, 2025, to August 19, 2025, the Company issued Promissory Notes in the aggregate principal amount of $695,000. The Notes bear an interest rate of 10% per annum and mature on June 30, 2026, (the "Maturity Date"). The Company is required to pay principal and interest on the Maturity Date.

On July 7, 2025, Renovaro Inc. ("Renovaro") entered into an Exchange Agreement (the "Exchange Agreement") with certain accredited investors (the "Investors"), all of whom are existing shareholders of the Company. Pursuant to the Exchange Agreement, the Investors agreed to exchange an aggregate of $9.7 million in outstanding secured promissory notes (the "Secured Notes") for $16.1 million in new convertible promissory notes (the "Convertible Notes"), representing a 65% premium to the principal and interest amount of the Secured Notes. The Convertible Notes mature on July 31, 2025, and do not bear any interest. The exchange was completed to restructure the Company's debt obligations and provide additional flexibility to support strategic initiatives.

Immediately following the issuance of the Convertible Notes on July 7, 2025, the Investors elected to convert the entire $16.1 million principal amount into an aggregate of 53.6 million shares of common stock (the "Conversion Shares"), based on the stated $0.30 per share conversion price. The $0.30 per share conversion price of the Convertible Notes represented a premium to the closing price of the Company's common stock on July 7, 2025, the date of execution and conversion. As a result, the issuance of the 53.6 million shares of common stock upon conversion of the Convertible Notes did not constitute a "below market" issuance under applicable Nasdaq listing rules and did not trigger stockholder approval requirements under Nasdaq Listing Rule 5635(d). The shares were issued without any additional consideration from the Investors.

As a result of the foregoing transactions, the Company (i) eliminated $9.7 million of secured indebtedness, (ii) issued $16.1 million in Convertible Notes to the same holders, and (iii) issued 53.6 million shares of common stock upon full conversion of such Convertible Notes. The shares of common stock will be issued on or before July 11, 2025, and no cash will be issued for any fractional shares. The transactions did not involve any cash proceeds to the Company.

Known Trends

Going Concern and Management's Plans

The financial statements included elsewhere herein for the year ended June 30, 2025, were prepared under the assumption that we would continue our operations as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. As of June 30, 2025, we had cash and cash equivalents of $92,700, an accumulated deficit of $510,462,570 and total liabilities of $29,580,681. We have incurred losses from continuing operations, have used cash in our continuing operations, and are dependent on additional financing to fund operations. These conditions raise substantial doubt about our ability to continue as a going concern for one year after the date the financial statements are issued. The financial statements included elsewhere herein do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Management has reduced overhead and administrative costs by streamlining the organization to focus around the development and validation of its AI driven cancer diagnostics platform. The Company has tailored its workforce to focus on these activities. In addition, the Company intends to attempt to secure additional required funding through equity or debt financing. However, there can be no assurance that the Company will be able to obtain any sources of funding. Such additional funding may not be available or may not be available on reasonable terms, and, in the case of equity financing transactions, could result in significant additional dilution to our stockholders. If we do not obtain required additional equity or debt funding, our cash resources will be depleted and we could be required to materially reduce or suspend operations, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us.

Funding that we may receive during fiscal 2026 is expected to be used to satisfy existing and future obligations and liabilities and working capital needs, to support commercialization of our products and conduct the clinical and regulatory work to develop our product candidates, and to begin building working capital reserves.

RESULTS OF OPERATIONS

Year ended June 30, 2025 compared to the year ended June 30, 2024.

The following table sets forth our revenues, expenses and net loss for the years ended June 30, 2025 and 2024. The financial information below is derived from our audited consolidated financial statements included elsewhere in this Annual Report.

		For the Years Ended
		June 30,								Increase/(Decrease)
		2025				2024				$				%
Operating Expenses
General and administrative		$	17,880,050			$	24,557,608				6,677,558				(27	)%
Research and development			537,428				2,708,829				(2,171,401	)			(80	)%
Intangible asset impairment			-				42,611,000				(42,611,000	)			(100	)%
Goodwill impairment			170,419,429				11,640,000				158,779,429				1,364	%
Depreciation and amortization			129,095				121,859				7,236				6	%
Total Operating Expenses			188,966,002				81,639,296				107,326,706				131	%
LOSS FROM OPERATIONS			(188,966,002	)			(81,639,296	)			(107,326,706	)			131	%
Other Income (Expense)
Change in fair value of contingent consideration			11,680,000				(3,048,183	)			14,728,183				(483	)%
Loss on extinguishment of debt			-				(1,303,578	)			1,303,578	)			(100	)%
Change in fair value of equity securities			(112,149	)			-				(112,149	)			100	%
Interest expense			(725,684	)			(1,011,322	)			285,638				(28	)%
Interest and other income (expense)			116,346				(1,423,449	)			1,539,795				(108	)%
Total Other Income (Expense)			10,958,513				(6,786,532	)			17.745,045				(261	)%
NET LOSS		$	(178,007,489	)		$	(88,425,828	)			(89,581,661	)			101	%

		For the Years Ended
		June 30,								Increase/(Decrease)
		2025				2024				$				%
Net Loss		$	(178,007,489	)		$	(88,425,828	)		$	(89,581,661	)			101	%
Other Comprehensive Income (Loss)
Foreign Currency Translation, net of taxes			10,985,688				(140,964	)			11,126,652				(7,893	)%
Comprehensive Loss		$	(167,0021,801	)		$	(88,566,792	)		$	(78,455,009	)			89	%

Revenues

We are a pre-revenue, pre-clinical biotechnology and artificial intelligence driven healthcare technology company. We have never generated revenues and have incurred losses since inception. We do not anticipate earning any revenues until our therapies or products are approved for marketing and sale.

Operating Expenses

Our operating expenses for the years ended June 30, 2025 and 2024 were $188,966,002 and $81,639,296, respectively, representing an increase of $107,326,706 or 131%. The largest contributors to the increase in operating expenses for the year ended June 30, 2025, were the increase in the non-cash goodwill impairment of $158,779,429 partially offset by the decreases in the non-cash intangible asset impairment of $42,611,000, general and administrative expenses of $6,677,558 and in research and development expenses of $2,171,401 compared to the year ended June 30, 2024.

General and administrative expenses for the years ended June 30, 2025 and 2024, were $17,880,050 and $24,557,608, respectively, representing a decrease of $6,677,558, or 27%. The decrease in general and administrative expenses is primarily related to decreases in consulting expenses of $2,783,367, legal expenses of $2,260,485, stock based compensation expense of $1,359,838, sales tax expense of $717,744, investor relations expenses of $526,229, advertising expenses of $247,491, board member compensation of $238,855, partially offset by an increase in compensation related expenses of $986,127, rent expenses of $174,590, information technology expenses of $145,199 and subscription related expenses of $112,738.

Research and development expenses for the years ended June 30, 2025, and 2024, were $537,428 and $2,708,829, respectively, representing a decrease of $2,171,401 or 80%. The decrease in research and development expenses is primarily related to decreases in collaborating partner expenses of $1,351,135 with CDMO and CROs related to discontinued product candidates, decreases in consulting expenses of $534,564, and decreases in consumables of $241,982.

Other Income (Expenses)

Net other income (expenses) for the years ended June 30, 2025 and 2024 was $10,958,513 and $(6,786,532), respectively, representing a change of $17,745,045 or 261%. The increase in other income was due primarily to the change in the fair value of the contingent consideration in the amount of $11,680,000, which resulted from the mark to market adjustment on the remaining contingent consideration liability in the year ended June 30, 2025, offset by interest expense of $725,684.

Net Loss

Net loss for the years ended June 30, 2025 and June 30, 2024 was $178,007,489 and $88,425,828, respectively, representing an increase in net loss of $89,581,661 or 101%. The increase in net loss was primarily due to the increase of non-cash goodwill impairment of $158,779,429, offset by the decrease in non-cash intangible asset impairment of $42,611,000, decrease in general and administrative expenses of $6,677,558, decrease in research and development expenses of $2,171,401 and by the change in fair value of contingent consideration of $14,728,183.

Liquidity and Capital Resources

We have historically satisfied our capital and liquidity requirements through funding from stockholders, the sale of our Common Stock and warrants, and debt financing. We have never generated any sales revenue to support our operations, and we expect this to continue until our therapies or products are approved for marketing in the United States and/or Europe. Even if we are successful in having our therapies or products approved for sale in the United States and/or Europe, we cannot guarantee that a market for the therapies or products will develop. We may never be profitable.

As noted above under the heading "Going Concern and Management's Plans," through June 30, 2025, we have incurred substantial losses. We will need additional funds both in the next twelve months and beyond for (a) research and development, (b) increases in personnel, (c) the purchase of equipment, and investment in the development and validation of our technology. The availability of any required additional funding cannot be assured. In addition, an adverse outcome in legal or regulatory proceedings in which we are currently involved or in the future may be involved could adversely affect our liquidity and financial position. We may raise such funds from time to time through public or private sales of our equity or debt securities. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could materially adversely affect our growth plans and our financial condition and results of operations.

As of June 30, 2025, the Company had $92,700 in cash and working capital of $(28,109,502) as compared to $220,467 in cash and working capital of $(28,312,274) as of June 30, 2024. The decrease in cash of $127,767 is primarily due to the cost of operations of $7,874,647, investment in equity securities of $500,000 and repayments of finance agreement of $971,231, partially offset by funding totaling $9,354,003 related to private placements and proceeds from note payables during theperiod.

Equity

On April 8, 2025, the Company issued 15,000,000 shares of Common Stock valued at $6,058,500 pursuant to the Stock Purchase Agreement of Biosymetrics, Inc. (see Note 10 to the Financial Statements).

On January 21, 2025, the Company issued 250,000 shares of Common Stock to its Chief Executive Officer of Renovaro Cube valued at $177,500 (see Note 10 to the Financial Statements).

On October 17, 2024, the Company issued 160,000 shares of Common Stock for consulting services valued at $118,400 (see Note 10 to the Financial Statements).

On October 14, 2024, the Company issued 500,000 shares of Common Stock for consulting services valued at $275,000 (see Note 10 to the Financial Statements).

On October 14, 2024, the Company issued 250,000 shares of Common Stock to its Chief Executive Officer valued at $137,500 (see Note 10 to the Financial Statements).

On August 1, 2024, the Company issued 2,000,000 shares of Common Stock for consulting services valued at $1,400,000 (see Note 10 to the Financial Statements).

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 Company is required to pay interest quarterly, in arrears, in cash, on the first day of each quarter of each year following the issue date prior to the maturity of the January 2024 Note. The January 2024 Note is convertible either at the option of the holder or automatically upon maturity into shares of the Company's Common Stock at the Note Conversion Price of $3.38.

December 2023 Notes - On December 20, 2023, the Company entered into Subscription Agreements to purchase Convertible Promissory Notes for an aggregate principal amount of $120,000 (the "December 2023 Notes"). The Company received a total of $120,000 from the private placement between December 2023 and January 2024. The December 2023 Notes bear an interest rate of 12% per annum and matured one year after their respective dates of issuance (the "Maturity Date"). The Company is required to pay interest quarterly, in arrears, in cash, on the first day of each quarter of each year following the issue date prior to the maturity of the December 2023 Notes. Notwithstanding the immediately foregoing, at the option of the holder, interest may accrue on the December Notes on a quarterly basis. The December 2023 Notes are convertible into shares of the Company's Common Stock in whole or in part at any time and from time to time, after the original issue date and prior to the Maturity Date, at a conversion price of $3.38 per share.

The January 2024 Note and December 2023 Notes balance at June 30, 2025 was $245,000 (see Note 8 to the Financial Statements).

Notes Payable -

Bridge Loans - From June 4, 2025 to June 14, 2025, the Company entered into agreements with Paseco ApS, a Danish entity controlled by a shareholder ("Paseco ApS") and Laksya Ventures Inc. to issue Promissory Notes for the principal amount of $1,725,000 to each note holder. The Company received $3,450,000 in gross proceeds. The notes bear an interest rate of 10% per annum and mature on December 31, 2025. The notes balance at June 30, 2025, was $3,450,000 with Paseco ApS and Laksya Ventures Inc. each holding $1,725,000 (see Note 8 to the Financial Statements).

From October 21, 2024 to January 24, 2025, the Company entered into agreements with Paseco ApS, a Danish entity controlled by a shareholder ("Paseco ApS"), to issue Promissory Notes for the principal amount of $2,650,000. The Company received $2,650,000 in gross proceeds. The notes bear an interest rate of 10% per annum and mature from December 31, 2024 to December 31, 2025. Approximately $700,000 matured on December 31, 2024, $900,000 matured on December 31, 2025 and $1,050,000 matured on January 31, 2025. On February 24, 2025, Paseco ApS assigned 50% of its ownership rights to Laksya Ventures Inc. with all terms remaining unchanged. The note balance at June 30, 2025, was $2,650,000 with Paseco ApS and Laksya Ventures Inc. each holding $1,325,000 (see Note 8 to the Financial Statements).

From November 12, 2024 to December 3, 2024, Renovaro Cube entered into an agreement with Paseco ApS, a Danish entity controlled by a shareholder ("Paseco ApS"), to issue Promissory Notes for the principal amount of €450,000. The note bears an interest rate of 10% per annum and matures on December 1, 2025. On February 24, 2025 Paseco ApS assigned 50% of its ownership rights to Laksya Ventures Inc. with all terms remaining unchanged. The note balance at June 30, 2025 was approximately $530,000 with Paseco ApS and Laksya Ventures Inc. each holding approximately $265,000 (see Note 8 to the Financial Statements).

On November 1, 2024, Renovaro Cube entered into an agreement with Yalla Yalla Limited, an investor to issue a Promissory Note for the amount of approximately €225,000. The note bears an interest rate of 10% per annum and matured on February 24, 2025. The note balance at June 30, 2025 was approximately $238,000 (see Note 8 to the Financial Statements).

On September 16, 2024, the Company entered into an agreement with RS Bio ApS, a Danish entity controlled by a shareholder ("RS Bio"), to issue a Promissory Note for the principal amount of $100,000 (the "September 2024 Note"). The Company received $100,000 in gross proceeds. The note bears an interest rate of 12% per annum and matured on December 31, 2024. On February 24, 2025 RS Bio assigned its ownership rights to Rene Sindlev with all terms remaining unchanged. The note balance at June 30, 2025 was $100,000 (see Note 8 to the Financial Statements).

On September 6, 2024, Renovaro Cube entered into an agreement with Paseco ApS, a Danish entity controlled by a shareholder ("Paseco ApS"), to issue a Promissory Note for the principal amount of €50,000. The note bears an interest rate of 12% per annum and matures on September 9, 2025. On February 24, 2025 Paseco ApS assigned 50% of its ownership rights to Laksya Ventures Inc. with all terms remaining unchanged. The note balance at June 30, 2025 was approximately $59,000 with Paseco ApS and Laksya Ventures Inc. each holding approximately $30,000 (see Note 8 to the Financial Statements).

On February 5, 2024, the Company entered into an agreement with RS Bio to issue a 5% Original Issue Discount Secured Promissory Note for the principal amount of $105,263 (the "February 2024 Note"). The Company received $100,000 in gross proceeds after taking into account the 5% original issue discount. The note bears an interest rate of 12% per annum and matured on December 31, 2024. On February 24, 2025 RS Bio assigned its ownership rights to Rene Sindlev with all terms remaining unchanged. The note balance, net of discount at June 30, 2025 was $105,263 (see Note 8 to the Financial Statements).

On January 2, 2024, the Company entered into an agreement with RS Bio to issue a 5% Original Issue Discount Secured Promissory Note for the principal amount of $526,315. The Company received a total of $500,000 in gross proceeds after taking into account the 5% original issue discount. The note bears an interest rate of 12% per annum and matured on December 31, 2024. On February 24, 2025 RS Bio assigned its ownership rights to Rene Sindlev with all terms remaining unchanged. The note balance, net of discount at June 30, 2025 was $526,315 (see Note 8 to the Financial Statements).

On November 3, 2023, the Company entered into an agreement with RS Bio to issue a 5% Original Issue Discount Promissory Note for the principal amount of $1,000,000. The Company received a total of $950,000 in gross proceeds after taking into account the 5% original issue discount. The discount of $50,000 will be accreted over the life of the note. The note bears an interest rate of 12% per annum and matured on December 31, 2024. On February 24, 2025 RS Bio assigned its ownership rights to Rene Sindlev with all terms remaining unchanged. The note balance, net of discount at June 30, 2025 was $750,000 (see Note 8 to the Financial Statements).

Promissory Note - On March 30, 2020 (the "Issuance Date"), the Company issued a Promissory Note in the principal amount of $5,000,000 (the "Promissory Note") to Paseco ApS. There have been eight amendments to the Promissory Note since the issuance date, the most recent of which is dated August 1, 2024. The principal amount of the Promissory Note, as amended, was payable and matured on November 1, 2024 (the "Maturity Date"). The Promissory Note, as amended, bears interest at a fixed rate of 12% per annum. On February 24, 2025 Paseco ApS assigned its ownership rights to Rene Sindlev with all terms remaining unchanged. The Promissory Note balance at June 30, 2025 is $831,497.

The Company's obligations under the referenced Promissory and Bridge Notes, except for those originally entered into by Renovaro Cube, are secured by a Security Agreement. To secure the Company's obligations under the Promissory Note, the Company entered into a Security Agreement with the Holder, pursuant to which the Company granted a lien on all assets of the Company (the "Collateral") for the benefit of Paseco ApS, Rene Sindlev and Laksya Ventures. Upon an Event of Default (as defined in the notes, respectively) Paseco ApS, Rene Sindlev and Laksya Ventures may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease, or dispose of the Collateral (see Note 8 to the Financial Statements).

Cash Flows

Year ended June 30, 2025 compared to the year ended June 30, 2024

Following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:

		For the Years Ended
		June 30,
		2025				2024
Net Cash Used in Operating Activities		$	(7,874,647	)		$	(10,971,430	)
Net Cash Used in Investing Activities			(500,000	)			(1,260,179	)
Net Cash Provided by Financing Activities			8,382,772				10,517,455
Effect of exchange rates on cash			(135,892	)			60,141
Net (Decrease) in Cash		$	(127,767	)		$	(1,654,013	)

At June 30, 2025, we had cash and cash equivalents of $92,700, a decrease of $127,767, when compared to the June 30, 2024 balance of $220,467. This decrease was primarily due to cash used in operating activities, partially offset by cash provided by financing activities.

We plan to use our cash and cash equivalents to fund research and development, specifically to increase investment in the development and validation of our AI driven cancer diagnostics platform. These activities will require an increase in selling, general and administrative costs, and research and development costs to support the expected growth. As additional funds are required, we may raise such funds from time to time through public or private sales of our equity or debt securities.

Cash used in operating activities represents the cash receipts and disbursements related to all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Net cash used in operating activities for the years ended June 30, 2025 and 2024 was $7,874,647 and $10,971,430, respectively, representing a decrease of $3,096,783. The decrease is primarily related to the changes in our operating assets and liabilities.

Net cash used in investing activities for the years ended June 30, 2025 and 2024 was $500,000 and $1,260,179, respectively, representing an decrease of $760,179. The decrease in cash used is primarily due to notes receivable prior to acquisition of Renovaro Cube of $1,255,600 in the prior period compared to $500,000 used for investment in equity securities in year ended June 30, 2025.

Net cash provided by financing activities for the years ended June 30, 2025 and 2024 was $8,382,772 and $10,517,455, respectively, representing a decrease of $2,134,683. The net cash provided by financing activities in the current year consists primarily of $2,376,181 of proceeds from private placements, $6,977,822 from the issuance of notes, and partially offset by repayments of $971,231 under a finance agreement. The prior year net cash from financing activities primarily consisted of 3,000,000 of proceeds from private placements, $8,045,663 from the issuance of notes, and $341,865 of proceeds from the exercise of warrants, partially offset by repayments of $870,073 under a finance agreement.

Off-Balance Sheet Arrangements

As of June 30, 2025, and 2024, we had no off-balance sheet arrangements. We are not aware of any material transactions which are not disclosed in our consolidated financial statements.

Significant Accounting Policies and Critical Accounting Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. On an ongoing basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Our most critical accounting estimates are detailed below, and our significant accounting policies are more fully described in Note 1 of the accompanying consolidated financial statements.

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, the related remaining capitalized patent costs are charged to expense. Definite life intangible assets are amortized on a straight-line basis over their estimated useful life. The estimated useful life of patents is twenty years from the date of application.

Indefinite life intangible assets include license agreements and goodwill acquired in a business combination. The Company accounts for indefinite life intangible assets in accordance with ASC 350. License agreement costs represent the fair value of the license agreement on the date acquired and are tested annually for impairment.

Goodwill - Goodwill is not amortized but is evaluated for impairment annually as of June 30, 2025 or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Impairment of Goodwill and Indefinite Lived Intangible Assets - We test for goodwill impairment at the reporting unit level, which is one level below the operating segment level. Our detailed impairment testing involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit and is based on discounted cash flows or relative market-based approaches. If the carrying value of the reporting unit exceeds its fair value, we record an impairment loss for such excess. The annual fair value analysis performed on goodwill supported that goodwill was impaired as of June 30, 2025. The Company recorded an impairment loss of $47,614,729 for the period ended September 30, 2024 and $122,804,700 for the period ended June 30, 2025, related to goodwill during the year ended June 30, 2025 (see Note 6 to the financial statements).

For indefinite-lived intangible assets, such as licenses acquired as an In-Process Research and Development ("IPR&D") asset, on an annual basis we determine the fair value of the asset and record an impairment loss, if any, for the excess of the carrying value of the asset over its fair value. For the year ended June 30, 2025, the carrying value of IPR&D was zero. For the year ended June 30, 2024, the carrying value of the licenses acquired as an IPR&D asset exceeded its fair value, due to changes in the projected economic benefits to be realized from these assets. The Company recorded impairment losses of zero and $42,611,000 during the years ended June 30, 2025 and 2024, respectively (see Note 6 to the financial statements).

The carrying values of IPR&D and goodwill at June 30, 2025, were zero and $5,963,000, respectively.

Fair Value of Financial Instruments - The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, "Fair Value Measurements". The authoritative guidance, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. There were no Level 2, or 3 assets, nor any Level 1, or 2 liabilities measured at fair value on a recurring basis as of June 30, 2025.

Level 1 assets held as of June 30, 2025, consisted of an investment in equity securities related to an extension agreement entered on February 28, 2024. The Company purchased 467,290 shares of common stock at a purchase price of $1.07 per share. The investment in equity securities was recorded at a fair value of $500,000 at the time of purchase and is subsequently remeasured to fair value at the end of each reporting period. As of June 30, 2025, the Company held 467,290 shares of common stock in connection with the investment in equity securities.

Level 3 liabilities held as of June 30, 2025, consisted of a contingent consideration liability related to the February 13, 2024, acquisition of Renovaro Cube (see Note 3).

Stock-Based Compensation - The Company has granted stock options, restricted share units ("RSUs") and warrants to certain employees, officers, directors, and consultants. The Company accounts for options in accordance with the provisions of FASB ASC Topic 718, Compensation - Stock Compensation. Stock based compensation costs for the vesting of options and RSUs granted to certain employees, officers, directors, and consultants for the years ended June 30, 2025 and 2024 were $3,313,291 and $4,673,129, respectively (see Note 10 to the 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.