Company: LNAI
Filing Date: 2025-07-30
Form Type: DEF 14A
Source: 0001731122-25-001053
Chunk: 23

Company: Lunai Bioworks Inc.
Filing Date: 2025-07-30
Form: DEF 14A
Chunk 23
---
 U.S. federal income tax treatment of a partner in the
partnership will generally depend on the status of the partner and the activities of the partnership. Accordingly, partnerships (and
other entities treated as partnerships for U.S. federal income tax purpose) holding our common stock and the partners in such
entities should consult their own tax advisors regarding the U.S. federal income tax consequences of the proposed Reverse Split to
them. In addition, the following discussion does not address the tax consequences of the Reverse Split under state, local and
foreign tax laws. Furthermore, the following discussion does not address any tax consequences of transactions effectuated before,
after or at the same time as the Reverse Split, whether or not they are in connection with the Reverse Split.

In general, the federal income
tax consequences of a Reverse Split will vary among stockholders depending upon whether they receive cash for fractional shares or solely
a reduced number of shares of common stock in exchange for their old shares of common stock. We believe that because the Reverse Split
is not part of a plan to increase periodically a stockholder’s proportionate interest in our assets or earnings and profits, the
Reverse Split should have the following federal income tax effects. The Reverse Split is expected to constitute a “recapitalization”
for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E) of the Code. A stockholder who receives solely a reduced number
of shares of common stock will not recognize gain or loss. In the aggregate, such a stockholder’s basis in the reduced number of
shares of common stock will equal the stockholder’s basis in its old shares of common stock and such stockholder’s holding
period in the reduced number of shares will include the holding period in its old shares exchanged. The Treasury Regulations provide detailed
rules for allocating the tax basis and holding period of shares of common stock surrendered in a recapitalization to shares received in
the recapitalization. Stockholders of our common stock acquired on different dates and at different prices should consult their tax advisors
regarding the allocation of the tax basis and holding period of such shares.

<div align='center'>14</div>

A stockholder that, pursuant
to the proposed Reverse Split, receives cash in lieu of a fractional share of our common stock should recognize capital gain or loss in
an amount equal to the difference, if any, between the amount of cash received and the portion of the stockholder’s aggregate adjusted
tax basis in the shares of our common stock