Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001731122-25-000258
Chunk: 29

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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Trust, the 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.

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 the Company’s motion to dismiss 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. The Company denies Plaintiffs’ allegations
and remaining claims and