Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 21

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 21
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. The order
seeks to balance fostering innovation with addressing risks associated with AI by providing eight guiding principles and priorities, such
as ensuring that consumers are protected from fraud, discrimination, and privacy risks related to AI. The order also calls for future
regulations from various agencies, such as the Department of Commerce (to draft guidance for detecting and authenticating AI content)
and the Federal Trade Commission (to ensure fair competition and reduce consumer harm). In alignment with the order, other agencies have
published guidance. Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies
challenging.

The FTC
has issued a report expressing a concern regarding AI and bias across industry sectors, including in the healthcare space, and has suggested
that such bias could lead to unfair and deceptive practices, among other concerns. Any changes to our ability to use AI or concerns about
bias could require us to modify our products and services or could have other negative financial impact on our business.

These
compliance obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to
change our product offerings or business practices, or prevent or limit our use of AI. If we cannot use AI, or if our use of AI is restricted,
our business may be less efficient, or we may be at a competitive disadvantage. Though we have taken steps to be thoughtful in our development,
training, and implementation of machine learning, including taking steps to comply with the laws and frameworks discussed above, our machine
learning-related processing could pose certain risks to our end-users, including patients, clinicians, and healthcare institutions, and
it is not guaranteed that regulators will agree with our approach to limiting these risks or to our compliance more generally. Any of
these factors could adversely affect our business, financial condition, and results of operations.

The results of pre-clinical
studies or earlier clinical studies are not necessarily predictive of future results, and if we fail to demonstrate efficacy in our pre-clinical
studies and/or clinical trials in the future our future business prospects, financial condition and operating results will be materially
adversely affected.

The success of our therapeutic
research and development efforts will depend upon our ability to demonstrate the efficacy of the treatments in our pipeline in pre-clinical
studies, as well as in clinical trials following IND approval by the FDA. Pre-clinical studies involve testing potential product candidates
in appropriate non-human disease models to demonstrate efficacy and