Summary of LUNA INNOVATIONS INC

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standa

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On August 17, 2009, Luna Innovations Incorporated (the "Company") filed a Form 12b-25 with the Securities and Exchange Commission to report that it would not timely file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2009. The Company reported that the failure to make the timely filing is a result of delay in the finalization of an engagement letter with the Company's independent accountant and the timing of receipt of necessary approval by the Bankruptcy Court which, in accordance with the U.S. Bankruptcy Code, must approve the Company's advisers.

On August 17, 2009, the Company received a notice of deficiency from the NASDAQ Stock Market ("NASDAQ") listing qualifications department staff (the "Staff") indicating that the Company no longer complied with the Rule 5250(c)(1) of the NASDAQ Listing Rules as a result of the failure to make the filing on Form 10-Q by the due date.

The Company has previously requested a hearing before the NASDAQ Listing Qualifications Panel (the "Panel") with respect to a previous Staff Determination Notice from NASDAQ dated July 17, 2009 because the Company filed for protection under Chapter 11 of the US Bankruptcy Code on July 17, 2009. The delisting action has been stayed pending a hearing before the Panel, which has been scheduled for August 27, 2009. Since there is a pending hearing, the Company does not qualify to provide NASDAQ with a plan of compliance within the next 60 days with respect to the latest notice of deficiency, and will be required to address this issue at the hearing. There can be no assurance that the Panel will grant the Company's request for continued listing. Pending a decision by the Panel, the Company's common stock will remain listed on the NASDAQ Global Market.

A copy of the press release announcing the late filing and the Staff's determination is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.