Lunai Bioworks Inc.

Lunai Bioworks Inc. operates at the intersection of two distinct but converging industries: AI-driven biomedical research and pre-clinical cell and gene therapy development. The company describes itself as an AI-driven biotechnology company focused on precision medicine, biomarker discovery, and therapeutic development for CNS disorders, biodefense, and other serious diseases with unmet medical need. Through its Renovaro Biosciences and BioSymetrics subsidiaries, the company combines multimodal data analytics with experimental biology to generate predictive insights intended to accelerate research and development activities and improve the efficiency of therapeutic and chemical countermeasure discovery. The AI-based healthcare solutions market is characterized as new and unproven, with the potential to decline or experience limited growth, and concerns over the use of AI may hinder adoption. The company's BioSymetrics subsidiary operates in a highly competitive market with companies including Recursion Pharma and insitro also focused on phenotype-based profiling using in vitro cellular profiling and AI. While similar in concept, Recursion and insitro's models provide evidence on cellular, but not multicellular or multi-organ phenotypes, so the company believes its platform is differentiated, specifically when investigating behavioral and neurological diseases. The company also notes that while murine models are broadly accepted as relevant for the study of neurological disorders, their experimental throughput is highly limited, and turnaround times for experimentation can be on the scale of months, resulting in substantial experimental cost. The biggest difference is scale — mice cannot be used in large-scale chemical screens using multi-well plates. Therefore, BioSymetrics is targeting a market further upstream, for testing larger groups of candidate compounds in libraries too large for mice. In the therapeutic area, numerous competitors are pursuing cancer immunotherapies that are more advanced in development than Renovaro Biosciences' program, and many have substantially greater financial, technical, clinical, manufacturing, regulatory and commercial resources. Competing therapies may demonstrate greater safety or efficacy, obtain regulatory approval sooner, be easier or less expensive to manufacture or administer, or achieve greater acceptance among patients, physicians and payors.

The company's competitive positioning rests on several stated differentiators. In cell therapy, the company believes its approach differs from many conventional dendritic cell therapies through its use of healthy-donor-derived CD34+ cells and its incorporation of genetic modifications intended to enhance immune-cell activation, recruitment and activity in the tumor microenvironment. The use of an allogeneic source is also intended to support standardized manufacturing and the production and banking of cells for use across multiple patients. These potential advantages remain subject to further preclinical and clinical evaluation and have not been demonstrated in clinical trials. In AI-driven drug discovery, the company's key differentiator is Contingent AI, in which any settable parameter for data processing, data integration, or feature selection is permuted and the corresponding effects on the downstream predictive model measured. This process is similar in nature to hyperparameter tuning in machine learning, however instead of optimizing only the machine learning model, the entire data science pipeline (including model selection) is subject to optimization. The company has applied this method extensively in drug discovery, producing marked improvements in experiment interpretation and lead generation. Another major component of the BioSymetrics platform is the Phenograph, a proprietary knowledge graph that maps human genes and phenotypes to those of model systems, allowing virtual phenotypic screening, target nomination, and active learning feedback. The Phenograph contains 5,856 diseases associated with one or more phenotypes in humans, and 16,676 human genes with one or more orthologous zebrafish genes. Zebrafish genes are mapped to phenotypic terms using over 300 individually-trained machine learning models that fill in the gaps of known gene-phenotype associations. The company also notes that BioSymetrics has designed deep learning-based computer vision software that automatically identifies and characterizes organ systems relevant to neurological, cardiovascular, and muscle development, and has developed a proprietary light stimulus battery and characterized a small number of known CNS therapeutics and unknown compounds, providing an initial basis for evaluation of chemical effects.

The company generates revenue through service arrangements and research collaborations rather than product sales. During fiscal 2026, the company recognized $51,992 of service revenue from a single research services customer. The company has not generated any revenue from product sales to date and does not expect to generate material product revenues for the foreseeable future. The company's business model centers on two operating subsidiaries: Renovaro Biosciences, which is developing allogeneic cell and gene therapies, and BioSymetrics, which operates an AI-driven biotechnology platform. A third wholly owned subsidiary, Lunai Bioworks IP, Inc., holds the intellectual property acquired in the May 2026 Neurobridge acquisition, including the N2B intranasal drug delivery platform. BioSymetrics collaborates with pharmaceutical companies, healthcare providers, and academic institutions to co-develop analytical tools and translational research programs. Application areas of the BioSymetrics platform include multi-omics integration for target identification and validation; predictive modeling of therapeutic efficacy and safety; clinical trial optimization, including patient stratification and response monitoring; and experimental screening of gene and small molecule effects for the purpose of identifying novel drug targets and therapeutics. The company is also pursuing government-funded research and development opportunities in biodefense, including opportunities involving the Biomedical Advanced Research and Development Authority (BARDA) and the U.S. Department of Defense. In April 2026, the company entered into its first commercial agreement in this area, a multi-year collaboration involving AI-powered chemical threat assessment. The company has entered into memoranda of understanding with academic and research investigators affiliated with Harvard Medical School and Brigham and Women's Hospital, the University of Utah, Purdue University, and the University of Colorado to support aspects of countermeasure research and development.

Renovaro Biosciences is a biotechnology company intending, if the necessary funding is obtained, to develop advanced allogeneic cell and gene therapies to promote stronger immune system responses potentially for long-term or life-long cancer remission in some of the deadliest cancers, and potentially to treat or cure serious infectious diseases such as Human Immunodeficiency Virus (HIV) infections. The strategic benefit of the allogeneic cell therapy technologies is to potentially allow for the manufacture of large, off-the-shelf banks of therapeutic cells that are readily available on demand by healthcare professionals, to potentially decrease the time between diagnosis and treatment. In certain treatments (e.g., HIV and cancer), cells taken from healthy donors are engineered to introduce signaling molecules that are designed to enhance the ability of specific immune cells to recognize diseased cells, and to help recruit other cells that will destroy cancer or virus infected cells. The company's lead oncology program is RENB-DC11, a genetically modified allogeneic dendritic cell therapeutic vaccine as a potential product for long-term remission of solid tumors, specifically pancreatic tumors. The allogeneic cell therapy platform has completed pre-IND, IND-enabling phase. Based on learnings from internal research, literature reviews of ongoing clinical development for solid tumors, and recent advances in immune modulation, the company has designed an innovative therapeutic vaccination platform that could potentially be used to induce life-long remission from some of the deadliest solid tumors such as pancreatic, liver, triple negative breast and head & neck cancers. The platform may one day enable broad immune enhancements that are combined with cancer specific antigens that could be applicable to a wide range of solid tumors. This approach allows the company to quickly adapt its approach to any patient solid tumor using the same banked allogenic drug substance. A second program, RENB-DC20, is a genetically modified allogeneic dendritic cell therapeutic vaccine as a potential treatment product for long-term remission of triple negative breast cancer. Triple negative breast cancer is a subtype of breast cancer that is negative for estrogens receptor (ER) negative, progesterone receptor (PR) negative and human epidermal growth factor receptor 2 (HER2). TNBC is characterized by its unique molecular profile, aggressive nature, and distinct metastatic patterns that lack targeted therapies. TNBC is well known for its aggressive behavior and is characterized by onset at a younger age, high mean tumor size, and higher-grade tumors. Based upon internal research, literature reviews of ongoing clinical development for solid tumors, and recent advances in immune modulation, the company believes it may have the ability to design an innovative therapeutic vaccination platform that could potentially be used to treat some of the deadliest and hard-to-treat solid tumors that include triple negative breast cancer.

BioSymetrics is a biomedical artificial intelligence company focused on integrating multimodal data sources, including genomics, imaging, electronic health records, and other real-world evidence, to advance biomarker discovery, therapeutic development, and precision medicine. BioSymetrics has developed proprietary machine learning pipelines that harmonize and analyze complex, heterogeneous datasets to uncover clinically actionable insights. These insights are designed to support pharmaceutical research, early disease detection, and personalized treatment strategies. The company has applied its platform to identify novel neuroactive compounds capable of resolving epilepsy-related phenotypes. Specifically, the company screened 1,400 compounds from a proprietary small molecule library both with and without addition of a chemical convulsant. The experimental component of this screen was completed by one technician in 10 days, giving an approximate pace of 1,000 compounds screened per technician per week. This study resulted in identification of a hit compound that later showed efficacy in a mouse seizure model, now being further progressed as a potential therapeutic by BioSymetrics. Additionally, during the course of this study the company screened approximately 100 known neuroactives, including clinical anticonvulsants, antidepressants, antipsychotics, and dopaminergic signaling activators and inhibitors. The company next examined the ability of one of these compounds (BioS_831) to resolve seizures in a murine model using a previously established electroshock seizure assay. After dosing each mouse with either BioS_831, negative control (vehicle), or positive control (Sodium Valproate), electroshock is delivered transauricularly using stimulation at 50 Hz and 50 mA for 0.8 seconds with a pulse width of 10 milliseconds. The total number of hind limb flexes, hind limb extensions, and mortality rate is monitored for 60 seconds following electroshock, as are other adverse events. The company screened BioS_831 at both a low and high dose and found that at 40 mg/kg of BioS_831 significantly increased latency time to tonic seizure induction and significantly reduced the number of observed tonic extension seizures, as compared to vehicle control. Notably, unlike the ASM Sodium Valproate, BioS_831 did not cause sedation or ataxia. Post-study PK analysis showed good distribution of BioS_831 into the brains of the test animals (average brain to plasma ratio 0.68). The success of this program has enabled the initiation of two additional grant-supported programs. The first of these programs is for Alcohol Use Disorder (AUD), an area of high prevalence and substantial unmet medical need. Through funding obtained through the NIH's STTR program, the company initiated a therapeutic discovery program leveraging its zebrafish platform. The second program is for a rare pediatric epilepsy caused by mutation in the CDKL5 gene, and is supported by funding from the LouLou foundation. Here the company is working in collaboration with a brain organoid company to test and develop novel therapeutics that are applicable not only for CDKL5-resultant epilepsies, but also for epilepsies of other origin.

The company is applying the BioSymetrics platform's toxicity and phenotypic screening capabilities to the identification and characterization of chemical and biological threats and the development of potential medical countermeasures. BioSymetrics' zebrafish-based behavioral profiling and computer vision infrastructure, which has been used to characterize therapeutic candidates, can also be applied to characterize neurotoxic and other harmful compounds by comparing their phenotypic profiles against profiles of known threat agents and potential countermeasures. In April 2026, the company entered into its first commercial agreement in this area, a multi-year collaboration involving AI-powered chemical threat assessment. The company is pursuing additional government-funded research and development opportunities in this area, including opportunities involving the Biomedical Advanced Research and Development Authority (BARDA) and the U.S. Department of Defense. The company has entered into memoranda of understanding with academic and research investigators affiliated with Harvard Medical School and Brigham and Women's Hospital, the University of Utah, Purdue University, and the University of Colorado to support aspects of countermeasure research and development. These MOUs contemplate collaborative activities that may include in vivo validation, mechanism-of-action characterization and translational development of potential countermeasure candidates identified or evaluated using the company's platform. The MOUs are with the individual investigators and not with the institutions with which they are affiliated. On May 1, 2026, Lunai Bioworks, through its wholly owned subsidiary Lunai Bioworks IP, Inc., acquired Neurobridge IP Holdings Incorporated, which held intellectual property relating to an intranasal drug delivery platform designed to facilitate delivery of therapeutic compounds to the central nervous system (the N2B platform), together with related intellectual property directed to a compound for the treatment of Alzheimer's disease. The consideration for the acquisition consisted of shares of the company's Series B Convertible Preferred Stock. The N2B platform was developed using intranasal apomorphine and has been evaluated in previously completed Phase I and Phase II clinical studies involving healthy volunteers and patients with Parkinson's disease. These studies generated pharmacokinetic and other clinical data regarding intranasal administration of apomorphine, including data concerning systemic absorption and cerebrospinal fluid exposure. Lunai's rights to the N2B platform are limited to the fields of biodefense medical countermeasures and Alzheimer's disease. In connection with the acquisition, the company entered into an agreement with Oncotelic Therapeutics, Inc., the originating developer of the N2B platform, pursuant to which Oncotelic provides certain intellectual property development and business development services relating to the platform. These activities include preparation and filing of additional patent applications, provision of technical and preclinical information, and support relating to potential government funding opportunities.

The company's financial performance reflects its pre-clinical stage and lack of product revenue. For the year ended June 30, 2026, the company reported a net loss of $3,562,479, compared to a net loss of $178,007,489 for the year ended June 30, 2025. The company had an accumulated deficit of $514,025,049 and $510,462,570 as of June 30, 2026 and 2025, respectively. As of June 30, 2026, the company had cash and cash equivalents of $1,713,653. The company does not believe that its cash and cash equivalents are sufficient for the next twelve months, with less than one month of available cash resources as of October 13, 2026. As of June 30, 2026, the company had a stockholders' deficit of $9,024,946, which is below the $2,500,000 minimum stockholders' equity requirement of Nasdaq Listing Rule 5550(b)(1). The company had 12 full-time employees as of June 30, 2026. The company's stock price has fluctuated between $1.09 and $12.00 per share from October 10, 2025, through October 9, 2026. On December 31, 2025, the aggregate market value of the voting and non-voting common equity held by non-affiliates was $21,311,198. As of October 13, 2026, the number of shares outstanding of the company's common stock was 5,034,452.

The company has not provided specific quantitative revenue, margin, or EPS guidance for the upcoming period. However, management has stated that it does not believe its cash and cash equivalents are sufficient for the next twelve months, with less than one month of available cash resources as of October 13, 2026. The company will require substantial additional financing to achieve its goals, and a failure to obtain this necessary capital when needed could force it to delay, limit, reduce or terminate its product development or commercialization efforts. The company continues to analyze various alternatives, including potentially obtaining debt or equity financings or other arrangements. The company's future success depends on its ability to raise capital. The company cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to it. If the company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and its current shareholders may experience dilution. If the company is unable to obtain funds when needed or on acceptable terms, it may be required to curtail its current development programs, cut operating costs, forgo future development and other opportunities, or even terminate its operations.

The company's primary growth vector is the advancement of its AI-driven precision medicine platform and therapeutic programs. The company is pursuing a strategy to, dependent upon raising sufficient funding to do so, leverage its clinical experience and expertise for the clinical development and regulatory approval of its gene therapy product candidates and advance its AI-driven healthcare technology both for the identification of novel therapeutics, and for the characterization of chemical threat agents and associated countermeasures. As part of its ongoing business strategy, the company continues to explore potential opportunities to acquire or license new product candidates and to collaborate on its existing products in development. The company's growth prospects and the future value of the company are primarily dependent on the progress of its ongoing and planned development programs for its product candidates as well as the outcome of its ongoing business development efforts and pipeline progression, together with the amount of its remaining available cash. The development of the company's product candidates and the outcome of its ongoing business development efforts and pipeline are highly uncertain. The company expects to continue to reassess and make changes to its existing development programs and pipeline strategy. The company's plans for its development programs may be affected by the results of competitors' clinical trials of product candidates addressing its current target indications, and its business development efforts and pipeline progression may also be affected by the results of competitors' ongoing research and development efforts. The company may modify, expand or terminate some or all its development programs, clinical trials or collaborative research programs at any time as a result of new competitive information or as the result of changes to its product pipeline or business development strategy.

A second growth vector is the company's biodefense initiative, which is applying the BioSymetrics platform's toxicity and phenotypic screening capabilities to the identification and characterization of chemical and biological threats and the development of potential medical countermeasures. In April 2026, the company entered into its first commercial agreement in this area, a multi-year collaboration involving AI-powered chemical threat assessment. The company is pursuing additional government-funded research and development opportunities in this area, including opportunities involving the Biomedical Advanced Research and Development Authority (BARDA) and the U.S. Department of Defense. There can be no assurance that the company will receive any additional government award, contract or funding. The company has entered into memoranda of understanding with academic and research investigators affiliated with Harvard Medical School and Brigham and Women's Hospital, the University of Utah, Purdue University, and the University of Colorado to support aspects of countermeasure research and development. These MOUs contemplate collaborative activities that may include in vivo validation, mechanism-of-action characterization and translational development of potential countermeasure candidates identified or evaluated using the company's platform. The MOUs are with the individual investigators and not with the institutions with which they are affiliated. The company is also actively pursuing non-dilutive funding and contractual opportunities with U.S. and Canadian government agencies in support of its therapeutic programs and biodefense applications. Government funding and procurement priorities may change as a result of budgetary constraints, changes in administration, policy priorities, geopolitical developments or other factors outside the company's control, which could delay, reduce or eliminate potential funding or contracting opportunities. In addition, the company's participation in government-funded or defense-related programs could expose it to reputational or investor-perception risks, including differing views regarding government policies, defense activities or the use of technologies developed through such programs. Any such developments could adversely affect the company's ability to obtain funding, enter into partnerships or maintain support among certain investors or other stakeholders.

The company's margin and cost outlook is dominated by its pre-clinical stage and lack of revenue. The company expects to continue to incur significant expenses and operating losses for the foreseeable future. The company anticipates these losses to increase as it continues to research, develop, and seek regulatory approvals for its product candidates and any additional product candidates it may acquire, in-license or develop, and potentially begin to commercialize product candidates that may achieve regulatory approval. The company may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect its business. The size of the company's future net losses will depend, in part, on the rate of future growth of its expenses and its ability to generate revenues. If any of the company's product candidates fails in clinical studies or does not gain regulatory approval, or if approved, fails to achieve market acceptance, the company may never become profitable. Even if the company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. The company anticipates that its expenses will increase in the future as it continues to invest in research and development of its existing product candidates, investigate and potentially acquire new product candidates and expand its manufacturing and commercialization activities. The company expects to expend substantial resources for the foreseeable future to continue the pre-clinical development of its cell, gene and immunotherapy product candidates, and the advancement and potential expansion of its pre-clinical research pipeline. The company also expects to continue to expend resources for the development and manufacturing of product candidates and the technology it has licensed or has a right to license from its licensors. These expenditures will include costs associated with research and development, potentially acquiring or licensing new product candidates or technologies, conducting pre-clinical and clinical studies and potentially obtaining regulatory approvals and manufacturing products, as well as marketing and selling products approved for sale, if any. Under the terms of certain of its license agreements, the company is obligated to make payments upon the achievement of certain development, regulatory and commercial milestones. The company will also need to make significant expenditures to develop a commercial organization capable of sales, marketing, and distribution for any products, if any, that it intends to sell itself in the markets in which it chooses to commercialize on its own. In addition, other unanticipated costs may arise. Because the design and outcome of the company's ongoing, planned and anticipated pre-clinical and clinical studies is highly uncertain, it cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of its product candidates.

The company's operational outlook is shaped by its remote work arrangements and reliance on third parties. The company does not currently occupy any material physical office facilities, and its employees primarily work remotely. The company maintains a virtual office address in Sacramento, California for administrative and corporate purposes. Certain legacy office leases (Century City, California and Boca Raton, Florida) remain outstanding and were in default as of June 30, 2026, although the company has ceased using the leased premises. The company believes that its current remote working arrangements are adequate for its present operations. The company relies on third-party contractors for the provision of professional, scientific, regulatory, and other services. As the company's development and commercialization plans and strategies develop, it may need additional managerial, scientific, operational, financial, and other resources. The company's management may need to divert a disproportionate amount of its attention away from its day-to-day operations and devote a substantial amount of time to managing these growth activities. The company might not be able to effectively manage the expansion of its operations, which may result in weaknesses in its infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees. The company's expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of its current and potential future product candidates. If the company's management is unable to effectively manage its growth, its expenses may increase more than expected and its ability to generate and grow revenue could be reduced and it might not be able to implement its business strategy. The company's future financial performance, its ability to commercialize product candidates, develop a scalable infrastructure and compete effectively will depend, in part, on its ability to effectively manage any future growth. As of June 30, 2026, BioSymetrics has 9 full time employees. As the company's growth plan and strategies develop, BioSymetrics must add a significant number of additional managerial, operational, financial and other personnel. Future growth will impose significant added responsibilities on members of management, including identifying, recruiting, integrating, retaining and motivating additional employees; managing its internal development efforts effectively, including creating compliant programs and processes, and managing the regulatory requirements for its products, while complying with its contractual obligations to contractors and other third parties; expanding its operational, financial and management controls, reporting systems and procedures; and managing the increasing complexity associated with a larger organization and expanded operations.

The company's capital allocation priorities are focused on preserving cash and obtaining additional financing. The company has never declared or paid cash dividends on its capital stock. The company currently intends to retain all of its future earnings, if any, to finance the growth and development of its business. As a result, capital appreciation, if any, of the company's common stock will be the sole source of gain for its stockholders for the foreseeable future. The company expects that significant additional capital will be needed in the future to continue its planned operations. To raise capital, the company may sell substantial amounts of common stock or securities convertible into or exchangeable for common stock in one or more transactions at prices and in a manner it determines from time to time. These future issuances of common stock or common stock-related securities, together with the exercise of outstanding options or warrants, and any additional shares that may be issued in connection with acquisitions or licenses, if any, may result in material dilution to the company's investors. Such sales may also result in material dilution to the company's existing stockholders, and new investors could gain rights, preferences, and privileges senior to those of holders of the company's common stock. Pursuant to the company's equity incentive plans, its Compensation Committee is authorized to grant equity-based incentive awards to its employees, non-employee directors and consultants. Future grants of RSUs, options and other equity awards and issuances of common stock under the company's equity incentive plans will result in dilution and may have an adverse effect on the market price of the company's common stock. In connection with the Neurobridge acquisition, the company issued eight shares of Series B Convertible Preferred Stock with an aggregate stated value of $20.0 million. The Series B Preferred Stock is not convertible unless and until the company obtains the stockholder approval required under Nasdaq Listing Rules 5635(a) and 5635(d) in connection with the Neurobridge acquisition and the potential issuance upon conversion of shares representing 20% or more of the company's pre-transaction outstanding common stock. Following receipt of such approval, the Series B Preferred Stock will be convertible into up to 1,666,666 shares of common stock at a conversion price of $12.00 per share — reflecting the proportionate adjustment of the original $1.50 conversion price and 13,333,333-share maximum required by the Series B Certificate of Designation for the May 2026 Reverse Stock Split — subject to a 4.99% beneficial ownership limitation (increasable to 9.99% upon 61 days' notice). Based on 4,615,503 shares of common stock outstanding as of June 30, 2026, full conversion would represent an increase of approximately 36% in the company's outstanding shares and would substantially dilute the ownership and voting power of its existing stockholders, and sales of the shares issued upon conversion (or the perception that such sales may occur) could depress the market price of the company's common stock. In addition, the Series B Preferred Stock has a liquidation preference equal to its aggregate stated value and ranks senior to the company's common stock with respect to distributions upon liquidation, dissolution or winding up. The aggregate liquidation preference of the Series B Preferred Stock is $20.0 million, which substantially exceeds the $1.84 million at which the Series B Preferred Stock is recorded in the company's consolidated financial statements. The recorded amount reflects the estimated fair value of the Series B Preferred Stock at issuance for accounting purposes and does not limit the amount payable to the holders in a liquidation. In any liquidation, dissolution or winding up of the company, holders of Series B Preferred Stock would be entitled to receive the full $20.0 million preference before any distribution to holders of the company's common stock and, because the company's total stockholders' deficit was $9,024,946 at June 30, 2026, holders of common stock would likely receive nothing. If the required stockholder approval is not obtained, the Series B Preferred Stock will remain outstanding with such preference. There can be no assurance as to whether or when stockholder approval will be obtained.

The company faces significant headwinds and constraints that management has explicitly flagged. There is substantial doubt about the company's ability to continue as a going concern, which may hinder its ability to obtain future financing. The company's consolidated financial statements as of June 30, 2026, have been prepared under the assumption that it will continue as a going concern for the next twelve months. As of June 30, 2026, the company had cash and cash equivalents of $1,713,653 and an accumulated deficit of $514,025,049. The company does not believe that its cash and cash equivalents are sufficient for the next twelve months. As a result of its financial condition and other factors described herein, there is substantial doubt about its ability to continue as a going concern. The company's ability to continue as a going concern will depend on its ability to obtain additional funding, as to which no assurances can be given. The company continues to analyze various alternatives, including potentially obtaining debt or equity financings or other arrangements. The company's future success depends on its ability to raise capital. The company cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to it. If the company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and its current shareholders may experience dilution. If the company is unable to obtain funds when needed or on acceptable terms, it may be required to curtail its current development programs, cut operating costs, forgo future development and other opportunities, or even terminate its operations. The company has also identified a material weakness in its internal control over financial reporting. Management concluded that the company's disclosure controls and procedures and its internal control over financial reporting were not effective as of June 30, 2026, due to a material weakness attributable to the company not having adequate resources to address complex accounting matters. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. Until remediated, this material weakness could result in errors in the company's financial statements, cause it to fail to meet its reporting obligations on a timely basis, and lead to a loss of investor confidence and a decline in the market price of its common stock. Remediation will require financial and personnel resources that the company may not have, and there can be no assurance that its remediation efforts will be successful or that it will be able to maintain effective internal control over financial reporting in the future.

The company also faces constraints related to its Nasdaq listing and legal proceedings. The company's common stock is listed on The Nasdaq Capital Market, which imposes continued listing requirements, including a minimum bid price of $1.00 per share, minimum stockholders' equity or market value requirements, and corporate governance standards. The company has previously received deficiency notices from Nasdaq, and it effected reverse stock splits of its common stock in September 2025 and May 2026 in part to regain and maintain compliance with the minimum bid price requirement. The company is currently subject to a one-year Mandatory Panel Monitor under Nasdaq Listing Rule 5815(d)(4)(B), and if it again fails to satisfy the Bid Price Rule during the monitoring period, the Listing Qualifications Department will issue a delist determination rather than a new compliance period. As of June 30, 2026, the company had a stockholders' deficit of $9,024,946, which is below the $2,500,000 minimum stockholders' equity requirement of Nasdaq Listing Rule 5550(b)(1). If Nasdaq determines that the company does not satisfy that requirement or one of the alternative continued listing standards under Nasdaq Listing Rule 5550(b), it could receive a deficiency notice or a delisting determination. There can be no assurance that the company will maintain compliance with the applicable continued listing requirements. If the company's common stock were delisted, the liquidity and market price of its common stock would likely be materially adversely affected, its ability to raise capital would be impaired, and its common stock could become subject to the penny stock rules, which could further limit trading in its common stock. The company is also subject to legal proceedings. On July 26, 2022 and July 28, 2022, securities class action complaints 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. 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. The court granted the lead plaintiff's motion for preliminary approval of the settlement on August 18, 2025. Plaintiff filed a motion for final approval of the settlement on October 21, 2025.

The most material and specific risks to Lunai Bioworks are its severe liquidity crisis, going concern doubt, and the resulting need for immediate additional capital. The company does not believe its cash and cash equivalents are sufficient for the next twelve months, with less than one month of available cash resources as of October 13, 2026. As of June 30, 2026, the company had cash and cash equivalents of $1,713,653 and an accumulated deficit of $514,025,049. There is substantial doubt about the company's ability to continue as a going concern. If the company is unable to obtain funds when needed or on acceptable terms, it may be required to curtail its current development programs, cut operating costs, forgo future development and other opportunities, or even terminate its operations. The company's Nasdaq listing is also at risk. As of June 30, 2026, the company had a stockholders' deficit of $9,024,946, which is below the $2,500,000 minimum stockholders' equity requirement of Nasdaq Listing Rule 5550(b)(1). The company is currently subject to a one-year Mandatory Panel Monitor under Nasdaq Listing Rule 5815(d)(4)(B), and if it again fails to satisfy the Bid Price Rule during the monitoring period, the Listing Qualifications Department will issue a delist determination rather than a new compliance period. If the company's common stock were delisted, the liquidity and market price of its common stock would likely be materially adversely affected, its ability to raise capital would be impaired, and its common stock could become subject to the penny stock rules, which could further limit trading in its common stock. The company has also identified a material weakness in its internal control over financial reporting. Management concluded that the company's disclosure controls and procedures and its internal control over financial reporting were not effective as of June 30, 2026, due to a material weakness attributable to the company not having adequate resources to address complex accounting matters. Until remediated, this material weakness could result in errors in the company's financial statements, cause it to fail to meet its reporting obligations on a timely basis, and lead to a loss of investor confidence and a decline in the market price of its common stock. Finally, the company faces significant legal proceedings. On July 26, 2022 and July 28, 2022, securities class action complaints 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. 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. The court granted the lead plaintiff's motion for preliminary approval of the settlement on August 18, 2025. Plaintiff filed a motion for final approval of the settlement on October 21, 2025.

Management's message to shareholders is dominated by the company's severe liquidity crisis and the need for immediate additional capital. The company has stated that it does not believe its cash and cash equivalents are sufficient for the next twelve months, with less than one month of available cash resources as of October 13, 2026. There is substantial doubt about the company's ability to continue as a going concern. The company's consolidated financial statements as of June 30, 2026, have been prepared under the assumption that it will continue as a going concern for the next twelve months. As of June 30, 2026, the company had cash and cash equivalents of $1,713,653 and an accumulated deficit of $514,025,049. The company will require substantial additional financing to achieve its goals, and a failure to obtain this necessary capital when needed could force it to delay, limit, reduce or terminate its product development or commercialization efforts. The company continues to analyze various alternatives, including potentially obtaining debt or equity financings or other arrangements. The company's future success depends on its ability to raise capital. The company cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to it. If the company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and its current shareholders may experience dilution. If the company is unable to obtain funds when needed or on acceptable terms, it may be required to curtail its current development programs, cut operating costs, forgo future development and other opportunities, or even terminate its operations. Management's strategic priorities for the period ahead are threefold: first, to secure additional financing to fund operations and continue the pre-clinical development of its cell, gene and immunotherapy product candidates; second, to advance its AI-driven precision medicine platform and therapeutic programs, including the RENB-DC11 and RENB-DC20 programs and the BioS_831 epilepsy program; and third, to pursue non-dilutive funding and contractual opportunities with U.S. and Canadian government agencies in support of its therapeutic programs and biodefense applications. The company is also actively pursuing government-funded research and development opportunities in biodefense, including opportunities involving the Biomedical Advanced Research and Development Authority (BARDA) and the U.S. Department of Defense. There can be no assurance that the company will receive any additional government award, contract or funding. The company has also identified a material weakness in its internal control over financial reporting. Management concluded that the company's disclosure controls and procedures and its internal control over financial reporting were not effective as of June 30, 2026, due to a material weakness attributable to the company not having adequate resources to address complex accounting matters. Until remediated, this material weakness could result in errors in the company's financial statements, cause it to fail to meet its reporting obligations on a timely basis, and lead to a loss of investor confidence and a decline in the market price of its common stock. Remediation will require financial and personnel resources that the company may not have, and there can be no assurance that its remediation efforts will be successful or that it will be able to maintain effective internal control over financial reporting in the future.