Key Highlights

• Lunai Bioworks, Inc. (Nasdaq: LNAI) completed a merger with Neurobridge IP Holdings Incorporated, acquiring critical intellectual property (IP) assets.
• The company issued eight (8) shares of Series B Convertible Preferred Stock with an aggregate stated value of \$20 million as merger consideration.
• Purpose: This transaction is intended to restore compliance with Nasdaq’s minimum stockholders’ equity rule and prevent imminent delisting.
• The new Series B Preferred Stock is non-voting, non-redeemable, and bears no dividends, but has a senior liquidation preference and is potentially convertible to common stock at a fixed price of \$1.50 per share, subject to shareholder approval.
• Special shareholder meeting scheduled for May 8, 2026 to vote on a reverse stock split intended to assist with regaining compliance with Nasdaq’s \$1.00 minimum bid price rule.
• Nasdaq compliance remains under review, with uncertainty regarding the sufficiency of the equity treatment.
• All Series B Preferred Stock is issued as restricted securities under Rule 144 and cannot be freely traded until certain conditions are met.

Details of the Transaction

On May 1, 2026, Lunai Bioworks, Inc. (“Lunai” or the “Company”) completed the acquisition of Neurobridge IP Holdings Incorporated (“Holdings”), a Delaware entity whose sole assets are a portfolio of patents. The merger consideration consisted entirely of newly created Series B Convertible Preferred Stock, with five shares issued to Oncotelic Inc. and three shares to Pelerin Therapeutics Inc. Each share carries a stated value of \$2.5 million.

The Series B Preferred Stock is non-voting (except as required by law and limited class-protection rights), bears no dividends, is not redeemable, and has no price-based anti-dilution protection. These shares are not considered “Future Priced Securities” under Nasdaq rules, meaning their conversion terms are fixed and not subject to reset.

Key restriction: The Series B Preferred Stock is only convertible into common stock upon receipt of shareholder approval, and only up to a 4.99% beneficial ownership limit (which may be increased to 9.99% with advanced notice and further increases require company and Nasdaq approval).

Additionally, all Series B Preferred Stock and underlying common stock are restricted securities (Rule 144), will carry customary restrictive legends, and will not be DTC-eligible until certain legal conditions have been met. Shares issued to Pelerin are also subject to additional Canadian hold restrictions.

Nasdaq Compliance and Listing Status

The Company has been under threat of delisting from Nasdaq due to non-compliance with two key rules:

• Stockholders’ Equity Rule (Rule 5550(b)(1)): Requires minimum \$2.5 million stockholders’ equity.
• Bid Price Rule (Rule 5550(a)(2)): Requires a \$1.00 minimum bid price.

On April 20, 2026, Lunai was notified it had until April 27, 2026, to regain compliance with the equity requirement. The company requested and received an extension to May 1, 2026. For the bid price requirement, Lunai has until June 1, 2026, and has requested an additional extension to June 4, 2026.

The issuance of \$20 million in Series B Preferred Stock is the primary action taken to restore compliance with the equity rule. The company believes, based on preliminary accounting, that its stockholders’ equity now exceeds the required minimum. However, Nasdaq’s Hearings Panel’s formal determination is still pending, and there is no assurance that Lunai will be deemed compliant. Failure to satisfy these conditions could result in delisting from the Nasdaq Capital Market.

Importantly, the conversion of Series B Preferred Stock into common shares is contingent upon future shareholder approval, which is not part of the upcoming May 8 special meeting ballot unless expressly added by a separate proxy supplement.

Special Shareholder Meeting and Reverse Stock Split Proposal

A special meeting of shareholders is scheduled for May 8, 2026 (postponed from May 4) to consider several proposals, including a reverse stock split intended to help the company regain compliance with the minimum bid price rule. The Board recommends voting FOR all proposals, including the reverse split.

Note: The approval for conversion of Series B Preferred Stock to common shares (“Stockholder Approval Proposal”) is not on the current proxy ballot and will require a separate proxy solicitation in the future.

Material Modifications to Shareholder Rights

• In the event of a company liquidation, dissolution, or winding up, holders of Series B Preferred Stock will have a senior liquidation preference equal to \$20 million aggregate stated value, ahead of common shareholders.
• Upon shareholder approval, Series B Preferred Stock will become convertible to common shares at a fixed price of \$1.50 per share, subject to beneficial ownership caps and Nasdaq compliance review.
• The issuance of the Series B Preferred Stock and related certificate of designation represents a material modification to the rights of existing common shareholders.
• All Series B Preferred Stock and any common shares issued upon conversion will be restricted securities, bearing multiple restrictive legends (including U.S. Securities Act, conversion gate, forfeiture/cancellation, and Canadian restrictions for Pelerin).

Risk Factors and Forward-Looking Statements

• There is no guarantee that Nasdaq will accept the equity treatment of the Series B Preferred Stock as sufficient for compliance, or that the company will regain compliance with the minimum bid price rule, even with a reverse split.
• If required shareholder approval for conversion is not obtained, the Series B Preferred Stock remains illiquid and non-convertible.
• The acquired patent portfolio’s value, enforceability, and impact on Lunai’s business remain subject to risk and further review.
• Ongoing risk of Nasdaq delisting persists until the Hearings Panel renders its final decision.

Investors should review the company’s filings, including the latest 10-K and subsequent 10-Qs, for additional risk factors.

Conclusion

This transaction is a major development for Lunai Bioworks, Inc., with potential to significantly affect share price and shareholder value. It represents a last-minute effort to restore Nasdaq compliance and preserve the company’s listing. The outcome of Nasdaq’s formal review, the reverse stock split vote, and any future shareholder approval for conversion of Series B Preferred Stock will be critical events for investors to monitor.

Shareholders and potential investors are strongly advised to follow all upcoming SEC filings, special meeting materials, and press releases as further details emerge.