Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001731122-25-000258
Chunk: 30

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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 intends to vigorously defend against these claims.

On August 24, 2023, counsel on
behalf of Weird Science, Wittekind, individually, and Wittekind, as trustee of the Trusts served a demand to inspect the Company’s
books and records (the “Demand”) pursuant to Delaware General Corporation Law, § 220 (“Section 220”). The
Demand seeks the Company’s books and records in connection with various issues identified in the Demand. The Company takes its obligations
under Section 220 seriously and, to the extent that the requests are proper under Section 220, intends to comply with those obligations.

On January 19, 2024, Weird Science
and Wittekind sent the Board of Directors a letter demanding it take corrective actions with respect to twenty-one issues identified
therein. On February 27, 2024, Weird Science and Wittekind sent the Board of Directors a supplemental letter that expanded their demand
for corrective actions to twenty-six issues. In response to these demand letters, the Board of Directors initially formed a Special Committee
(“Special Committee”) of independent directors on February 29, 2024. The Special Committee retained Stradling Yocca Carlson
& Rauth LLP as its counsel to investigate the issues identified in the demand letters. The Special Committee’s investigation
is ongoing.

On January 23, 2024, Weird Science and Wittekind filed a shareholder derivative action in the United States District Court
for the Central District of California against certain officers, directors, and investors of the Company, as well as other defendants,
in connection with, inter alia, Weird Science and Wittekind’s demand for corrective action. Plaintiffs filed an amended
complaint on June 21, 2024. The First Amended Verified Stockholder Derivative Complaint (“Derivative Complaint”) alleges,
among other claims, violations of Section 13(d) and 14(a) and Rules 10b-5(a), 10b-5(c) and 14a-9 of the Exchange Act of 1934. The Derivative
Complaint also includes claims of breach of fiduciary duty, corporate waste, unjust enrichment, and contribution/indemnification. Weird
Science and Wittekind seek unspecified compensatory, exemplary, and punitive damages and certain injunctive relief. The Derivative Complaint
names the Company as a nominal defendant. On July 19, 2024, certain of the director defendants, who had