Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 1133

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 1133
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ating results.

Litigation, regulatory proceedings,
such as the investigations described above, as well as the related class action claims and lawsuits, and securities matters that we are
currently facing or could face, can be protracted and expensive, and have results that are difficult to predict. Certain of these matters
include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally,
our legal costs for any of these matters, either alone or in the aggregate, could be significant. Adverse outcomes with respect to any
of these legal or regulatory proceedings may result in significant settlement costs or judgments, penalties, and fines. Even if these
proceedings are resolved in our favor, the time and resources necessary to resolve them could divert the resources of our management and
require significant expenditures. See Note 11 - Commitments and Contingencies in the Notes to our Consolidated Financial
Statements in Part II, Item 8 of this Annual Report on Form 10-K and the section titled “Legal Proceedings” in Part I, Item
3 of this Annual Report on Form 10-K.

22

The results of litigation, investigations,
claims, and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal
and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if
these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to
litigate or resolve them, could harm our business, financial condition, and operating results.

Negative publicity has had
and may continue to have a negative impact on our business and may have a long-term effect on our relationships with our customers, partners
and collaborators.

Our business and reputation have
been negatively affected by negative publicity resulting from the arrest, indictment and conviction of Serhat Gümrükcü,
a co-founder of the Company and an inventor of some of the Company’s intellectual property. If we are unable to rebuild the trust
of our collaborators, research institutions and investors, and if further negative publicity continues, we could experience a substantial
negative impact on our business. We have experienced claims and litigation as a consequence of these matters, including stockholder class
actions in connection with a decline in our stock price and litigation with Mr. Gümrükcü. Related legal expenses of defending
these claims have negatively impacted our operating results. Continuing higher legal fees, potential new claims, liabilities from existing
cases and