Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001731122-25-000258
Chunk: 89

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 8
Chunk 89
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 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.

    18

On November 27, 2024, Weird Science and Wittekind filed
a notice of appeal of the court’s decision granting the director defendants’ motion to dismiss. The appeal remains pending.

On June 21, 2024, the Company filed
suit against Weird Science, Wittekind, and certain trusts in connection with the February 16, 2018