Company: LNAI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001731122-25-001544
Chunk: 19

Company: Lunai Bioworks Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 19
---
Investors”),
all of whom are existing shareholders of the Company. Pursuant to the Exchange Agreement, the Investors agreed to exchange an aggregate
of $9.7 million in outstanding secured promissory notes (the “Secured Notes”) for $16.1 million in new convertible promissory
notes (the “Convertible Notes”), representing a 65% premium to the principal and interest amount of the Secured Notes. The
Convertible Notes mature on July 31, 2025, and do not bear any interest. The exchange was completed to restructure the Company’s
debt obligations and provide additional flexibility to support strategic initiatives.

Immediately following the issuance of the Convertible
Noes on July 7, 2025, the Investors elected to convert the entire $16.1 million principal amount into an aggregate of 5.36 million shares
of common stock (the “Conversion Shares”), based on the stated $3.00 per share conversion price. The $3.00 per share conversion
price of the Convertible Notes represented a premium to the closing price of the Company’s common stock on July 7, 2025, the date
of execution and conversion.

    14

On July 25, 2025, the Company issued 5,500
shares of Common Stock for settlement of accounts payable valued at $17,050.

On September 5, 2025, the Company
issued 79,647 shares of Common Stock for settlement of accounts payable valued at $167,259.

On September 18, 2025, the Company filed a Certificate of Amendment to the
Certificate of Incorporation of the Company (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware
to effect a 1-for-10 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”), either issued and outstanding or held by the Company as treasury stock, effective as of 12:01 a.m. (New York time) on September
29, 2025 (the “Reverse Stock Split”). All shares and the respective per-share amounts have been retroactively restated to
reflect the reverse split. The Common Stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market on September
30, 2025.

Stock-based Compensation 

The Company recognizes compensation
costs for stock option awards to employees and directors based on their grant-date fair value