Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001731122-25-000258
Chunk: 172

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 4
Chunk 172
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 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. 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. 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