Company: LNAI
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001731122-25-001316
Chunk: 1122

Company: Lunai Bioworks Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 1122
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 requirements than federal law and may apply to items or services reimbursed by any payor (including commercial insurers and cash-paying patients); state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare professionals and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare professionals or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

If our operations are found to
be in violation of any of such laws or any other governmental laws or regulations that apply, they may be subject to penalties, including,
without limitation, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, exclusion
from participation in federal and state healthcare programs, additional program integrity obligations, individual imprisonment, injunctions,
recall or seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, refusal to permit
us to enter into supply contracts, including government contracts, contractual damages, reputational harm, administrative burdens, diminished
profits, and future earnings, any of which could have a material adverse effect on our business, financial condition, result of operations,
and cash flows. These additional healthcare regulations could affect our current and future arrangements with healthcare professionals,
principal investigators, consultants, customers and third-party payors.

Moreover, the introduction of
legislation, implementation of new regulations, or enforcement of existing regulations that have a negative impact on the commercial prospects
for the types of products we are developing could negatively impact our share price and our ability to raise capital.

Coverage and Reimbursement

In the United States, third-party
payors include federal and state healthcare programs, government authorities, private managed care providers, private health insurers
and other organizations. Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the
cost-effectiveness of medical drug products and medical services, in addition to questioning their safety and efficacy. Such payors may
limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all the FDA-approved
drugs for a particular indication. Third-party payor coverage may be more limited than the purposes for which the FDA or foreign regulatory
authorities approve the