Company: LNAI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001731122-25-000765
Chunk: 125

Company: Lunai Bioworks Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 125
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conclusion on the fact that the Company has identified a material weakness in controls over financial reporting, detailed above. We expect
to be deficient in our disclosure controls and procedures until sufficient capital is available to hire the appropriate internal accounting
staff.

Changes in Internal Controls 

There have been no changes in our
internal controls over financial reporting during the nine months ended March 31, 2025, that have materially affected or are reasonably
likely to materially affect our internal controls.

36

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

Securities Class Action Litigation.
On July 26, 2022 and July 28, 2022, securities class action complaints (the former, the “Chow Action” and the latter, the
“Manici Action”) and together, the “Securities Class Action Litigation”) were filed by purported stockholders
of the Company in the United States District Court for the Central District of California against the Company and certain of the Company’s
current and former officers and directors. The complaints allege, among other things, that the defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions
of material fact in connection with the Company’s relationship with Serhat Gümrükcü and its commercial prospects.
The complaints seek unspecified damages, interest, fees, and costs. On November 22, 2022, the Manici Action was voluntarily dismissed
without prejudice, but the Chow action remains pending. On October 22, 2023, the Court appointed a lead plaintiff in the Chow Action.
The lead plaintiff filed an amended complaint on December 15, 2023. The Company filed a motion to dismiss the amended complaint on March
15, 2024. The Court denied the Company’s motion to dismiss on June 28, 2024. A mediation was held on September 17, 2024, after which
the parties signed a stipulation of settlement, dated November 8, 2024. The plaintiff filed their motion for preliminary approval of the
settlement on December 9, 2024. On December 18, 2024, the Company filed a notice of non-opposition to the motion for preliminary approval
of the settlement. On January 7, 2025, the Court took the plaintiff’s motion for preliminary approval of the settlement under consideration