Luna Innovations Notifies Nasdaq of Non-Compliance with Continued Listing Standards

Stockholders` Deficit Triggers Noncompliance with Quantitative Standards; Audit
Committee Composition Requirement Subject to Cure Period
ROANOKE, Va.--(Business Wire)--
On May 15, 2009, Luna Innovations Incorporated (NASDAQ:LUNA) notified Nasdaq
that it was not in compliance with the standards for continued listing on the
Nasdaq Global Market in connection with the filing of its Quarterly Report on
Form 10-Q for the period ended March 31, 2009. Luna Innovations confirmed to
Nasdaq that it no longer satisfied the requirements of Nasdaq Marketplace Rule
5450(b)(1)(A), which specifies that an issuer must maintain stockholders` equity
of at least $10 million. Luna Innovations does not meet the alternative "Market
Value" or "Total Assets/Total Revenue" standards for continued listing at this
time. The Nasdaq Listing Qualifications Staff confirmed this compliance
deficiency in a letter dated May 19, 2009.

The Nasdaq Listing Qualifications Staff has permitted Luna Innovations until
June 3, 2009 to provide Nasdaq with a specific plan to regain and maintain
compliance with the continued quantitative listing standards and requirements of
the Nasdaq Global Market. During this time, Luna Innovations common stock will
continue to trade on the Nasdaq Global Market, subject to the company`s
continued compliance with other Nasdaq listing requirements. If the plan of
compliance is approved following review, Luna Innovations may be granted an
additional extension to regain compliance for an undetermined period that may
extend no longer than September 1, 2009, which is 105 days following the date of
the original deficiency notice. If Luna Innovations is unable to regain
compliance within the permitted time period or a staff extension is not granted,
it may then receive a delisting determination notice. In the event that Nasdaq
determines to delist the company`s common stock from the Nasdaq Global Market,
Luna Innovations intends to appeal the proposed delisting to the extent it is
permitted to do so under the Nasdaq Marketplace Rules.

In addition, on May 12, 2009, Luna Innovations notified the Nasdaq Stock Market
that it no longer complied with Nasdaq Marketplace Rule 5605(c)(2)(A), which
requires the audit committee of a listed company to be composed of at least
three independent directors. On May 12, 2009, John C. Backus, Jr.`s term as a
director and member of the company`s audit committee concluded, and, as a
result, only two independent directors remained as members of Luna`s audit
committee.

Luna Innovations intends to fill the vacancy on its audit committee and to
regain compliance with Nasdaq`s audit committee requirements as expeditiously as
possible. In the meantime, Luna Innovations will rely on the cure period set
forth in Nasdaq Marketplace Rule 5605(c)(4)(B), as confirmed by a letter from
the Nasdaq Listing Qualifications Staff dated May 14, 2009. This cure period
will run through the earlier of the company`s 2010 annual meeting of
stockholders or May 12, 2010. During this time, Luna Innovations common stock
will continue to trade on the Nasdaq Global Market, subject to the company`s
continued compliance with other Nasdaq listing requirements.

About Luna Innovations:

Luna Innovations Incorporated (www.lunainnovations.com) is focused on sensing
and instrumentation, and pharmaceutical nanomedicines. Luna develops and
manufactures new-generation products for the healthcare, telecommunications,
energy and defense markets. Luna`s products are used to measure, monitor,
protect and improve critical processes in the markets we serve. Through its
disciplined commercialization business model, Luna has become a recognized
leader in transitioning science to solutions. Luna is headquartered in Roanoke,
Virginia.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release includes information that constitutes "forward-looking statements"
made pursuant to the safe harbor provisions of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, including
statements regarding, but not limited to, Luna`s plans to regain and maintain
compliance with Nasdaq`s listing standards. The company attempts, whenever
possible, to identify forward-looking statements by words such as "intends,"
"will," "plans," "anticipates," "expects," "may," "estimates," "believes,"
"should," "projects," or "continue," or the negative of those words and other
comparable words. Actual events or results may differ materially from the
expectations expressed in such forward-looking statements as a result of various
factors, including risks and uncertainties, many of which are beyond the
company`s control. Factors that could cause actual results to differ materially
from the expectations expressed in such forward-looking statements include, but
are not limited to, the outcome of Luna`s litigation with Hansen Medical, Inc.
and Luna`s ability to regain and maintain compliance with the Nasdaq listing
requirements and standards.

Additional factors that may affect the future results of the company are set
forth in the company`s quarterly and annual reports on Form 10-Q and Form 10-K,
respectively, and other filings with the Securities and Exchange Commission
("SEC"), which are available at the SEC`s website at http://www.sec.gov, and at
the company`s website at http://www.lunainnovations.com.

These risk factors are updated from time to time through the filing of periodic
reports with the SEC. The statements made in this press release are based on
information available to the company as of the date of this release and Luna
Innovations undertakes no obligation to update any of the forward-looking
statements herein after the date of this press release. Stockholders of or
potential investors in Luna Innovations are cautioned not to place undue
reliance on our forward-looking statements, which speak only as of the date such
statements are made.

Luna Innovations Incorporated
Media Contact:
Karin Clark
1-540-769-8400
kclark@lunainnovations.com
or
Investor Contact:
Dale Messick
Chief Financial Officer
1-540-769-8400
messickd@lunainnovations.com

Copyright Business Wire 2009