Company: LNAI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001731122-25-001544
Chunk: 156

Company: Lunai Bioworks Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part II, Item 1
Chunk 156
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 Dybul 2020 Angel Annuity Trust, and the Ty Mabry 2021 Annuity Trust (collectively, the “Trusts”)
(collectively, “Plaintiffs”) filed a Verified Complaint against the Company in the Court of Chancery of Delaware. In the Verified
Complaint, Plaintiffs alleged that the Company breached the February 16, 2018 Investor Rights Agreement between the Company, Weird Science,
and RS Group ApS (the “Investor Rights Agreement”). According to the Verified Complaint, the Investor Rights Agreement required
the Company to (i) notify all “Holders” of “Registrable Securities” at least 30 days prior to filing a registration
statement and (ii) afford such Holders an opportunity to have their Registrable Securities included in such registration statement. Plaintiffs
alleged that the Company breached these registration rights by failing to provide the required notice in connection with S-3 registration
statements filed by the Company on July 13, 2020 and February 11, 2022. The Company moved to dismiss the Verified Complaint on September
15, 2023.

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On December
4, 2023, in lieu of opposing the motion to dismiss, Plaintiffs filed a Verified First Amended Complaint (“FAC”). In the FAC,
Plaintiffs assert claims against the Company and others for purported breaches of the Investor Rights Agreement, fraud, tortious interference
with a contract, and several other torts. Plaintiffs seek compensatory, exemplary, and punitive damages, as well as certain declaratory
relief, specific performance, and pre- and post-judgment interest, costs, and attorneys’ fees. The Company filed a motion to dismiss
the FAC on December 18, 2023 and the court held a hearing on November 15, 2024. At the hearing, the court dismissed (1) all claims brought
on behalf of Wittekind and the Trusts, (2) the fraudulent concealment claim against the Company and others (without prejudice), and (3)
the breach of contract claim against the Company related to a registration statement that was not filed in 2023. At the hearing, the court
also found that punitive damages were not available to Plaintiffs. The court took the remaining issues briefed on the Company’s
motion to dismiss under advisement.

On February
26, 2025, the Court ruled on the balance of the claims against the Company and (