Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001731122-25-000258
Chunk: 64

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 64
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 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 agreed to waive service of the summons and Derivative Complaint,
filed a motion to dismiss the Derivative Complaint on a variety of procedural and substantive grounds. A hearing on the motion dismiss
was held on October 3, 2024 and the court subsequently took the motion under submission. On October 22, 2024, the plaintiffs filed a
notice of certain subsequent events that they allege relate to their pending motion to dismiss. On October 29, 2024, the court granted
the director defendants’ motion to dismiss and dismissed the Derivative Complaint without prejudice, but also without leave to
amend.

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