Company: LNAI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001731122-25-000765
Chunk: 34

Company: Lunai Bioworks Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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ment claim against the Company and others (without prejudice),
and (3) the breach of contract claim against the Company related to a registration statement that was not filed in 2023. At the hearing,
the court also found that punitive damages were not available to Plaintiffs. The court took the remaining issues briefed on the Company’s
motion to dismiss under advisement. On February 26, 2025, the court ruled on the balance of the claims against the Company and (1) denied
the Company’s motion to dismiss Weird Science’s breach of contract claims related to registration statements filed in 2020
and 2022; (2) dismissed the fraudulent inducement claim as time barred; and (3) dismissed the declaratory judgment claim. The Company
denies Plaintiffs’ allegations and remaining claims and intends to vigorously defend against these claims.

On August 24, 2023, counsel on
behalf of Weird Science, Wittekind, individually, and Wittekind, as trustee of the Trusts served a demand to inspect the Company’s
books and records (the “Demand”) pursuant to Delaware General Corporation Law, § 220 (“Section 220”). The
Demand seeks the Company’s books and records in connection with various issues identified in the Demand. The Company takes its obligations
under Section 220 seriously and, to the extent that the requests are proper under Section 220, intends to comply with those obligations.

On January 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