In re Luna Innovations Incorporated Securities Litigation

You have received the Notice because the parties are seeking approval of a proposed settlement on behalf of Class Members, and you have been identified as a potential Class Member either from the transfer agent’s record of ownership of Luna Innovations, Inc. securities or by your broker or custodian if you purchased or acquired Luna Innovations, Inc. securities in “street name.”

The Court directed that the Notice be sent to Class Members because they have a right to know about the proposed settlement of the Action, and about all of their options, before the Court decides whether to approve the settlement.

The Notice explains the Action, the settlement, Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them.

The Action was brought by the Court-appointed Lead Plaintiff and Class Representative George Lang. Class Representative is represented by the Court-appointed Lead Counsel Hagens Berman Sobol Shapiro LLP. Class Representative asserted claims under Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder against Defendants Luna Innovations Inc., Scott A. Graeff, Eugene J. Nestro, and George Gomez-Quintero.

The operative complaint in the Action was filed on October 11, 2024.

Class Representative alleged that during the Class Period, Defendants made materially false and misleading statements in violation of § 10(b) of the Exchange Act, Rule 10b-5 promulgated thereunder, and § 20(a) of the Exchange Act, which caused the price of Luna securities to trade at artificially inflated prices. Specifically, Class Representative alleged that Defendants misled investors by failing to disclose that Luna's financial statements from May 16, 2022 to November 14, 2023 improperly recognized unearned revenue, would require restatement, and were supported by ineffective disclosure controls and procedures. As a result, the company’s public statements about its business and prospects were materially false or lacked a reasonable basis. Class Representative alleged that persons who purchased Luna securities during the Class Period suffered economic losses when the price of Luna securities declined as a result of a series of corrective disclosures between March 12, 2024, and April 25, 2024. Defendants deny Class Representative’s allegations and deny any liability whatsoever to any member of the Class.

The Notice is NOT an expression of the Court’s opinion on the merits of any of the claims in the Action or whether the Defendants engaged in any wrongdoing.

To learn more about what has happened in the Action to date, including a detailed history, please see the Stipulation and other relevant pleadings which are available at www.LunaInnovationsSecuritiesSettlement.com (the “Settlement Website”). Instructions on how to get more information are also included in Question 24 below.

In a class action, one or more persons or entities sue on behalf of people and entities who have similar claims. Together, these people and entities are referred to as a Class, and each is a Class Member. One court resolves the issues for all Class Members at the same time, except for those Class Members who exclude themselves from the Class (the process for which is described more fully in Question 13 below).

The Class Representative made claims against the Defendants on behalf of Class Members. The Defendants deny that they have done anything wrong or violated any statute and admit no liability. No court has decided in favor of the Defendants or the Class. Instead, all parties agreed to the settlement to avoid the costs and risks of further litigation, including trial and post-trial appeals, and the Class Representative agreed to the settlement to ensure that Class Members will receive compensation. The Class Representative and Class Counsel all believe the settlement is in the best interest of all Class Members in light of the real possibility that continued litigation could result in no recovery at all.

To see if you will get money from this settlement, you first have to ascertain if you are a Class Member.

The Court directed that everyone who fits these descriptions is a Class Member: all Persons who purchased or otherwise acquired Luna securities between May 16, 2022, and April 19, 2024, inclusive (the “Class Period”), and were damaged thereby, except those Persons and entities that are excluded, as described below.

PLEASE NOTE: RECEIPT OF THE NOTICE DOES NOT MEAN YOU ARE A CLASS MEMBER OR ENTITLED TO RECEIVE A PAYMENT FROM THE SETTLEMENT. IF YOU ARE A CLASS MEMBER AND YOU WISH TO BE ELIGIBLE TO GET A PAYMENT FROM THE SETTLEMENT, YOU MUST SUBMIT THE CLAIM FORM INCLUDED WITH THE NOTICE SO THAT IT IS POSTMARKED OR SUBMITTED ONLINE BY JANUARY 16, 2026.

Excluded from the Settlement Class are: (i) the Defendants; (ii) members of the immediate family of defendants Scott Graeff, Eugene Nestro, and George Gomez-Quintero; (iii) any person who is or was an officer or director of Luna; (iv) any firm or entity in which Defendants have or had a majority ownership interest; (v) Luna’s liability insurance carriers; (vi) any affiliates, parents, or subsidiaries of Luna; (vii) all Luna plans that are covered by ERISA; and (viii) the legal representatives, agents, affiliates, heirs, beneficiaries, successors-in-interest, or assigns of any excluded person or entity, in their respective capacity as such. Also excluded are any Persons or entities who properly exclude themselves by filing a valid and timely request for exclusion in accordance with the requirements set by the Court.

If you are still not sure whether you are included in the settlement, you can ask for free help. You can contact the Claims Administrator toll-free at 1-888-851-6078 , or you can fill out and return the Proof of Claim enclosed with the Notice, to see if you qualify.

A settlement has been reached to resolve this Action, the terms and conditions of which are set forth in the Stipulation and the Exhibits thereto. The following description of the proposed settlement is only a summary, and reference is made to the text of the Stipulation, on file with the Court or accessible at www.LunaInnovationsSecuritiesSettlement.com,for a full statement of its provisions.

The Settlement Fund consists of $7,300,000.00 in cash, plus any interest earned thereon.

The Settlement Fund will be used to pay expenses for the Action, to pay for the Notice and the processing of claims submitted by Class Members, to pay Taxes and Tax Expenses, and to pay attorneys’ fees and any awards to Class Representative.

The balance of the Settlement Fund (the “Net Settlement Fund”) will be distributed, in accordance with the Plan of Allocation found in the Notice here, to Class Members who submit valid and timely Proofs of Claim.

The effectiveness of the settlement is subject to a number of conditions and reference to the Stipulation is made for further particulars regarding these conditions.

Your share of the fund will depend on several things, including how many Class Members submit a timely and valid Proof of Claim, the total dollar amount of the claims represented by the valid Proofs of Claim that Class Members send in, the number of Luna shares you purchased or acquired, how much you paid for the shares, when you purchased or acquired them, and if you sold your shares and for how much.

By following the instructions in the Plan of Allocation, you can calculate your claim. It is unlikely that you will get a payment for the full amount of your claim. After all Class Members have sent in their Proofs of Claim, the payment you get will be a part of the Net Settlement Fund equal to your claim divided by the total of all valid claimants’ claims. (See the Plan of Allocation found in the Notice here on pages 10-18 for more information on your claim.)

You may submit a Proof of Claim as described below. If you choose this option, you will share in the proceeds of the proposed settlement if your claim is timely, valid, and entitled to a distribution under the Plan of Allocation described below and if the proposed settlement is finally approved by the Court; and you will be bound by the Judgment and release to be entered by the Court as described below.

TO PARTICIPATE IN THE DISTRIBUTION OF THE NET SETTLEMENT FUND, YOU MUST TIMELY SUBMIT A PROOF OF CLAIM. A Proof of Claim is enclosed with the Notice, or it may be downloaded at www.LunaInnovationsSecuritiesSettlement.com. Read the instructions carefully, fill out the Proof of Claim, include all the documents the form asks for, sign it, and mail or submit it to the Claims Administrator so that it is postmarked or electronically submitted no later than January 16, 2026. The Claim Form may be submitted online at www.LunaInnovationsSecuritiesSettlement.com . Unless the Court orders otherwise, if you do not timely submit a valid Proof of Claim, you will be barred from receiving any payments from the Net Settlement Fund but will in all other respects be bound by the provisions of the Stipulation and the Judgment.

The Court will hold a Settlement Hearing on February 17, 2026 at 10:00 a.m., to decide whether to approve the settlement. If the Court approves the settlement after that hearing, there might be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient.

As a Class Member, you are bound by any and all determinations or judgments in the Action in connection with the Settlement entered into or approved by the Court, whether favorable or unfavorable to the Class, and you shall be deemed to have, and by operation of the Judgment shall have, fully released all of the Released Claims against the Released Defendant Persons, whether or not you submit a valid Proof of Claim.

Each Settlement Class Member will be bound by all determinations and judgments in this lawsuit, whether favorable or unfavorable, unless such person or entity mails or delivers a written Request for Exclusion from the Settlement Class, addressed to Luna Securities Litigation – EXCLUSIONS, Luna Innovations Securities Settlement, PO Box 2876, Portland, OR, 97208-2876. The exclusion request must be received no later than January 27, 2026. You will not be able to exclude yourself from the Settlement Class after that date. Each Request for Exclusion must: (a) state the name, address and telephone number of the person or entity requesting exclusion, and in the case of entities the name and telephone number of the appropriate contact person; (b) state that such person or entity “requests exclusion from the Settlement Class in In re Luna Innovations Inc. Securities Litigation, Case No. 2:24-cv-02630-CBM-KSx”; (c) identify and state the number of shares of Luna securities that the person or entity requesting exclusion purchased/acquired and/or sold during the Settlement Class Period (i.e., between May 16, 2022, and April 19, 2024, inclusive), as well as the dates and prices of each such purchase/acquisition and sale; and (d) be signed by the person or entity requesting exclusion or an authorized representative. A Request for Exclusion shall not be valid and effective unless it provides all the information called for in this paragraph and is received within the time stated above or is otherwise accepted by the Court.

If you do not want to be part of the Settlement Class, you must follow these instructions for exclusion even if you have pending, or later file, another lawsuit, arbitration, or other proceeding relating to any Released Plaintiffs’ Claim against any of the Defendants’ Releasees.

Defendants have the right to terminate the Settlement if valid requests for exclusion are received from members of the Settlement Class in an amount that exceeds an amount agreed to by Plaintiffs and Defendants.

No. If you exclude yourself, you may not send in a Proof of Claim to ask for any money.

The Court appointed the law firm of Hagens Berman Sobol & Shapiro, LLP as Lead Counsel and Class Counsel to represent the Class in this Action, including you (assuming you are a Class Member). These lawyers are called Class Counsel.

You will not be charged for these lawyers. They will be paid from the Settlement Fund to the extent the Court approves their application for fees and expenses. If you want to be represented by your own lawyer, you may hire one at your own expense.

At the Settlement Hearing, Class Counsel will request that the Court award aggregate attorneys’ fees according to the terms of the retainer agreement between the Class Representative and Class Counsel. These attorney’s fees are estimated to be no more than 30% of the Settlement Amount, or $2,190,000. Class members are not personally liable for any such fees or any other expenses (estimated not to exceed $150,000 for litigation expenses, and $300,000 for Notice and Administration Expenses). The net recovery for Class Members (also referred to as the Net Settlement Fund) is estimated to be at least $4,660,000 ($7,300,000 minus all of the foregoing fees and expenses). In addition, Lead Plaintiff may seek payment not to exceed $3,500 for his time and expenses incurred in representing the Class.

To date, Class Counsel and State Class Counsel have not received any payment for their services representing Class Members, nor have they been paid any of their expenses. The fees requested by Class Counsel and State Class Counsel will compensate counsel for their efforts in achieving the settlement for the benefit of the Class and for the risks they undertook in representing the Class on a wholly contingent basis. Class Counsel and State Class Counsel believe their total attorneys’ fee requests are well within the range of fees awarded to plaintiff’s counsel under similar circumstances in other litigation of this type. The percentage fee award that Class Counsel will request is consistent with the fee caps that were approved by the Class Representative and shared with the Court at the outset of the Action.

If you are a Class Member, you may, but are not required to, enter an appearance through counsel of your own choosing and at your own expense, provided that such counsel must file an appearance on your behalf on or before January 27, 2026, and must serve copies of such appearance on the attorneys listed below by both email and hard copy mail. If you do not enter an appearance through counsel of your own choosing, you will be represented by Class Counsel listed below.

Any Class Member who objects to any aspect of the settlement, including the Plan of Allocation, or the applications for attorneys’ fees and expenses, may appear and ask to be heard at the Settlement Hearing. The Court can only approve or deny the settlement; the Court cannot change its terms. You can ask the Court to deny approval of the settlement by filing an objection.

You may object to the proposed settlement in writing. You may also appear at the Settlement Hearing, either in person or through your own attorney. If you appear through your own attorney, you are responsible for any legal expenses charged by that attorney. Any objection must (1) include your name, address, and telephone number; (2) clearly identify the case name and number (In re Luna Innovations Inc. Securities Litigation, Case No. 2:24-cv-02630-CBM-KS (C.D. Cal.)); (3) demonstrate your membership in the Class, including the date(s), price(s), and number(s) of shares of all purchases, acquisitions, and/or sales of Luna securities from May 16, 2022, through April 19, 2024, inclusive; (4) contain a statement of the reasons for objection; and (5) be submitted to the Court either by mailing to the Office of the Clerk of the United States District Court for the Central District of California, First Street U.S. Courthouse, 350 W. 1st Street, Suite 4311, Los Angeles, CA 90012, or by filing them in person at any location of the United States District Court for the Central District of California, or electronically by ECF on the docket for this case. Copies of such objections must also be provided by email and hard copy mail to Class Counsel and Defendant’s counsel listed above. Such objections, papers, and briefs must be received or filed, not simply postmarked, on or before January 27, 2026.

Only Class Members who have submitted written notices of objection in the manner and time provided above will be heard at the Settlement Hearing, unless the Court orders otherwise. Any Class Member who does not make their objection in the manner and time provided above shall be deemed to have waived such objection and shall be foreclosed from making any objection to the fairness or adequacy of the proposed settlement, to the Plan of Allocation, or to the award of attorneys’ fees and expenses, unless otherwise ordered by the Court.

The Settlement Hearing will be held on February 17, 2026 at 10:00 a.m., before the Honorable Consuelo Marshall, United States District Judge, at the United States District Court for the Central District of California, 350 W. 1st Street, Suite 4311, Los Angeles, CA 90012. The purpose of the Settlement Hearing will be to determine: (1) whether the proposed settlement, as set forth in the Stipulation, consisting of $7,300,000.00 in cash, should be approved as fair, reasonable, and adequate to the Class Members; (2) whether the proposed plan to distribute the Net Settlement Fund (the “Plan of Allocation”) is fair, reasonable, and adequate; (3) whether the applications by Class Counsel for attorneys’ fees and expenses, and Class Representative’s awards should be approved; and (4) whether the proposed Judgment should be entered. The Court may adjourn the Settlement Hearing to another time (i.e., reschedule) without further notice to the Class. Before the Settlement Hearing, Class Members who plan to attend should check the Settlement Website or the Court’s PACER site (see Question 24 below) to confirm that the date of the Settlement Hearing has not been changed.

No. Class Counsel will answer questions the Court may have. But you are welcome to attend at your own expense. If you send an objection or statement in support of the settlement, you are not required to go to Court to discuss it. As long as you mailed your objection on time, the Court will consider it. You may also pay your own lawyer to attend, but you are not required to do so. Class Members do not need to appear at the hearing or take any other action to indicate their approval.

If you object to any aspect of the settlement, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must submit a written statement saying that it is your “Notice of Intention to Appear in In re Luna Innovations Inc. Securities Litigation, Case No. 2:24-cv-02630-CBM-KS.” Persons who intend to object to any aspect of the settlement and desire to present evidence at the Settlement Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the Settlement Hearing. You cannot speak at the hearing if you exclude yourself.

You may do nothing at all. If you choose this option, you will not share in the proceeds of the settlement, but you will be bound by any judgment entered by the Court, and you shall be deemed to have, and by operation of the Judgment shall have, fully released all of the Released Claims against the Released Defendant Persons.

As a Class Member, in consideration for the benefits of the settlement, you will be bound by the terms of the settlement and you will release the Released Defendant Persons from the Released Claims as defined below.

“Defendants” refers, collectively, to Defendants.

“Released Claims” means any and all rights, liabilities, suits, debts, obligations, demands, damages, losses, judgment matters, issues, claims (including Unknown Claims), and causes of action of every nature and description whatsoever, in law, equity, or otherwise, whether accrued or unaccrued, fixed or contingent, liquidated or unliquidated, whether arising under federal, state, local, statutory, common law, foreign law, or any other law, rule, or regulation, and whether class and/or individual in nature, concerning, based on, arising out of, or in connection with all claims and causes of action that Lead Plaintiff or any other member of the Settlement Class (i) asserted in the Action, or (ii) were or could have been asserted in any forum that, both (a) arise out of the facts, matters, statements, or omissions alleged in the Action and (b) relate to the purchase, acquisition, sale, disposition, or holding of Luna securities. This release does not cover, include, or release claims relating to the enforcement of this Settlement.

“Released Defendant Persons” means Defendants and all of Defendants’ past and present officers, directors, employees, insurers, subsidiaries, affiliates, successors, representatives, attorneys, underwriters, and agents.

If the proposed settlement is approved, the Court will enter a Judgment (the “Judgment”). Upon the Effective Date of the Judgment, the Class Representative and all Class Members and anyone claiming through or on behalf of any of them shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged all Released Claims against the Released Defendant Persons, whether or not such Class Member executes and delivers the Proof of Claim and Release, whether or not such Class Member shares in the Settlement Fund, and whether or not such Class member objects to the settlement, and will be forever barred and enjoined from commencing, instituting, prosecuting, or continuing to prosecute any action or other proceeding in any court of law or equity, arbitration tribunal or administrative forum, asserting any and all Released Claims against any of the Released Defendant Persons, except to enforce the Stipulation.

The Notice contains only a summary of the terms of the proposed settlement and does not describe all of the details of the Stipulation. For the precise terms and conditions of the settlement, please see the Stipulation available at www.LunaInnovationsSecuritiesSettlement.com; by contacting Class Counsel at 510-725-3000; by accessing the Court docket in the Action through the Federal Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.cacd.uscourts.gov, or by visiting the office of the Clerk at the United States District Court for the Central District of California, First Street U.S. Courthouse, 350 W. 1st Street, Suite 4311, Los Angeles, CA 90012, between 9:00 a.m. and 4:00 p.m., Monday through Friday, excluding Court holidays.