Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 723

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 6
Chunk 723
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, 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
Noes on July 7, 2025, the Investors elected to convert the entire $16.1million 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 without any cash proceeds to the Company.

F-36

Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Principal Executive Officer
and Principal Financial Officer (the “Certifying Officers”) are responsible for establishing and maintaining disclosure controls
and procedures for the Company. The Certifying Officers have designed such disclosure controls and procedures to ensure that material
information is made known to the Certifying Officers, particularly during the period in which this Report was prepared.

The Certifying Officers conducted
a review of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act, Rules 13a-15(e) and
15-d-15(e)) as of the end of the period covered by this Annual Report (the “Evaluation Date”). Based upon that evaluation,
the Certifying Officers concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective in ensuring that
the information we were required to disclose in reports that we file or submit under