Filed Pursuant to Rule 424(b)(3)
Registration No. 333-259179
Prospectus Supplement No. 2 Dated February 11, 2025
(To Prospectus Dated October 7, 2024)
Aeluma, Inc.
11,010,002 shares of Common Stock
This Prospectus Supplement No. 2 (the “Prospectus
Supplement”) updates and supplements the prospectus of Aeluma, Inc., a Delaware corporation (the “Company,” “we,”
“us,” or “our”) dated October 7, 2024, as amended (the “Prospectus”), with the following attached
document which we filed with the Securities and Exchange Commission:
| A. | Our Quarterly Report on Form 10-Q
for the six months ended December 31, 2024, filed with the Securities Exchange Commission on February 11, 2025. |
This Prospectus Supplement
should be read in conjunction with the Prospectus, which is required to be delivered with this Prospectus Supplement. This Prospectus
Supplement updates, amends and supplements the information included in the Prospectus. If there is any inconsistency between the information
in the Prospectus and this Prospectus Supplement, you should rely on the information in this Prospectus Supplement.
This Prospectus Supplement
is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any amendments or supplements
to it.
The purchase of the securities
offered through the Prospectus involves a high degree of risk. Before making any investment in our common stock and/or warrants, you should
carefully consider the risk factors section beginning on page 6 of the Prospectus.
You should rely only on
the information contained in the Prospectus, as supplemented or amended by this Prospectus Supplement and any other prospectus supplement
or amendment thereto. We have not authorized anyone to provide you with different information.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy
or accuracy of the Prospectus. Any representation to the contrary is a criminal offense.
The date of this Prospectus Supplement is February
11, 2025
Index to Filings
Annex A
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended December 31, 2024
or
☐
TRANSITION REPORT PURSUANT TO PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _______ to _______
Commission
File Number: 000-56218
AELUMA,
INC.
(Exact
Name of Registrant as Specified in Charter)
| Delaware |
|
85-2807351 |
(State or Other Jurisdiction
of Incorporation) |
|
(I.R.S. Employer
Identification No.) |
27
Castilian Drive
Goleta,
California 93117 |
| (Address
of Principal Executive Offices) |
(805)
351-2707
(Registrant’s
telephone number, including area code)
(Former
name and address, if changed since last report)
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of exchange on which registered |
| None |
|
- |
|
- |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer |
☐ |
Accelerated filer |
☐ |
| Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
| |
Emerging growth company |
☒ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As
of February 7, 2025, there were 12,247,481 shares of the issuer’s common stock, $0.0001 par value per share, outstanding and no
share of preferred stock, $0.0001 par value per share, outstanding.
TABLE
OF CONTENTS
PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements
Aeluma,
Inc. and Subsidiary
Consolidated
Balance Sheets
| | |
December 31,
2024
(unaudited) | | |
June 30,
2024 | |
| Assets | |
| | |
| |
| Current assets: | |
| | |
| |
| Cash and cash equivalents | |
$ | 3,063,059 | | |
$ | 1,291,072 | |
| Accounts receivable | |
| 1,324,632 | | |
| 60,004 | |
| Deferred compensation | |
| 6,171 | | |
| 20,133 | |
| Prepaids and other current assets | |
| 136,307 | | |
| 21,637 | |
| Total current assets | |
| 4,530,169 | | |
| 1,392,846 | |
| Property and equipment: | |
| | | |
| | |
| Equipment | |
| 1,572,291 | | |
| 1,531,494 | |
| Leasehold improvements | |
| 546,864 | | |
| 546,864 | |
| Accumulated depreciation | |
| (809,436 | ) | |
| (608,630 | ) |
| Property and equipment, net | |
| 1,309,719 | | |
| 1,469,728 | |
| Intangible assets | |
| 5,333 | | |
| 6,833 | |
| Right of use asset - facility | |
| 899,623 | | |
| 961,626 | |
| Other assets | |
| 13,014 | | |
| 13,014 | |
| Total assets | |
$ | 6,757,858 | | |
$ | 3,844,047 | |
| | |
| | | |
| | |
| Liabilities and stockholders’ equity | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 182,932 | | |
$ | 317,237 | |
| Accrued expenses and other current liabilities | |
| 172,414 | | |
| 180,706 | |
| Lease liability, current portion | |
| 133,460 | | |
| 128,743 | |
| Total current liabilities | |
| 488,806 | | |
| 626,686 | |
| Lease liability, long term portion | |
| 873,276 | | |
| 941,200 | |
| Derivative liabilities | |
| 5,048,174 | | |
| - | |
| Convertible notes (Note 3) | |
| 1,379,690 | | |
| - | |
| Total liabilities | |
| 7,789,946 | | |
| 1,567,886 | |
| Commitments and contingencies | |
| - | | |
| - | |
| Stockholders’ equity: | |
| | | |
| | |
| Preferred stock, $0.0001 par value: 10,000,000 authorized, and none issued and outstanding at December 31, 2024 and June 30, 2024 | |
| - | | |
| - | |
| Common stock, $0.0001 par value: 50,000,000 shares authorized, and 12,242,481 and 12,817,500 shares issued and outstanding at December 31, 2024 and June 30, 2024 | |
| 1,224 | | |
| 1,218 | |
| Additional paid-in capital | |
| 16,215,492 | | |
| 15,899,304 | |
| Accumulated deficit | |
| (17,248,804 | ) | |
| (13,624,361 | ) |
| Total stockholders’ equity | |
| (1,032,088 | ) | |
| 2,276,161 | |
| Total liabilities and stockholders’ equity | |
$ | 6,757,858 | | |
$ | 3,844,047 | |
The
accompanying notes are an integral part of these financial statements
Aeluma,
Inc. and Subsidiary
Consolidated
Statements of Operations (unaudited)
| | |
Three Months Ended
December 31, | | |
Six Months Ended
December 31, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Revenue | |
$ | 1,612,519 | | |
$ | 262,992 | | |
$ | 2,093,254 | | |
$ | 295,392 | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Cost of revenue | |
| 584,549 | | |
| 136,767 | | |
| 899,124 | | |
| 151,906 | |
| Research and development | |
| 268,061 | | |
| 651,099 | | |
| 669,135 | | |
| 1,485,968 | |
| General and administrative | |
| 370,311 | | |
| 603,925 | | |
| 866,777 | | |
| 1,269,028 | |
| Total operating expenses | |
| 1,222,921 | | |
| 1,391,791 | | |
| 2,435,036 | | |
| 2,906,902 | |
| Income (loss) from operations | |
| 389,598 | | |
| (1,128,799 | ) | |
| (341,782 | ) | |
| (2,611,510 | ) |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| Interest income | |
| 101 | | |
| 279 | | |
| 203 | | |
| 681 | |
| Amortization of discount on convertible notes | |
| (283,043 | ) | |
| - | | |
| (427,819 | ) | |
| - | |
| Changes in fair value of derivative liabilities | |
| (3,001,480 | ) | |
| - | | |
| (2,855,045 | ) | |
| - | |
| Total other income (expense), net | |
| (3,284,422 | ) | |
| 279 | | |
| (3,282,661 | ) | |
| 681 | |
| Loss before income tax expense | |
| (2,894,824 | ) | |
| (1,128,520 | ) | |
| (3,624,443 | ) | |
| (2,610,829 | ) |
| Income tax expense | |
| - | | |
| - | | |
| - | | |
| - | |
| Net loss | |
$ | (2,894,824 | ) | |
$ | (1,128,520 | ) | |
$ | (3,624,443 | ) | |
$ | (2,610,829 | ) |
| Loss per share - basic and diluted | |
$ | (0.24 | ) | |
$ | (0.09 | ) | |
$ | (0.30 | ) | |
$ | (0.21 | ) |
| Weighted average common shares outstanding - basic and diluted | |
| 12,212,403 | | |
| 12,167,930 | | |
| 12,195,415 | | |
| 12,418,579 | |
The
accompanying notes are an integral part of these financial statements
Aeluma,
Inc. and Subsidiary
Consolidated
Statement of Stockholders’ Equity (unaudited)
Three
Months Ended December 31, 2024 and 2023
| | |
Common Stock | | |
Additional
paid-in | | |
Accumulated | | |
Total
Stockholders’ | |
| | |
Shares | | |
Amount | | |
capital | | |
Deficit | | |
Equity | |
| Balance, October 1, 2024 | |
| 12,178,424 | | |
$ | 1,218 | | |
$ | 16,066,395 | | |
$ | (14,353,980 | ) | |
$ | 1,713,633 | |
| Stock options exercised | |
| 62,327 | | |
| 6 | | |
| (6 | ) | |
| - | | |
| - | |
| Stock warrants exercised | |
| 1,730 | | |
| - | | |
| - | | |
| - | | |
| - | |
| Stock-based compensation | |
| - | | |
| - | | |
| 149,103 | | |
| - | | |
| 149,103 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (2,894,824 | ) | |
| (2,894,824 | ) |
| Balance, December 31, 2024 | |
| 12,242,481 | | |
$ | 1,224 | | |
$ | 16,215,492 | | |
$ | (17,248,804 | ) | |
$ | (1,032,088 | ) |
| | |
Common Stock | | |
Additional
paid-in | | |
Accumulated | | |
Total
Stockholders’ | |
| | |
Shares | | |
Amount | | |
capital | | |
Deficit | | |
Equity | |
| Balance, October 1, 2023 | |
| 12,167,930 | | |
$ | 1,217 | | |
$ | 15,407,715 | | |
$ | (10,544,375 | ) | |
$ | 4,864,557 | |
| Stock-based compensation | |
| - | | |
| - | | |
| 135,919 | | |
| - | | |
| 135,919 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (1,128,520 | ) | |
| (1,128,520 | ) |
| Balance, December 31. 2023 | |
| 12,167,930 | | |
$ | 1,217 | | |
$ | 15,543,634 | | |
$ | (11,672,895 | ) | |
$ | 3,871,956 | |
Six
Months Ended December 31, 2024 and 2023
| | |
Common Stock | | |
Additional
paid-in | | |
Accumulated | | |
Total
Stockholders’ | |
| | |
Shares | | |
Amount | | |
capital | | |
Deficit | | |
Equity | |
| Balance, July 1, 2024 | |
| 12,178,424 | | |
$ | 1,218 | | |
$ | 15,899,304 | | |
$ | (13,624,361 | ) | |
$ | 2,276,161 | |
| Stock options exercised | |
| 62,327 | | |
| 6 | | |
| (6 | ) | |
| - | | |
| - | |
| Stock warrants exercised | |
| 1,730 | | |
| - | | |
| - | | |
| - | | |
| - | |
| Stock-based compensation | |
| - | | |
| - | | |
| 316,194 | | |
| - | | |
| 316,194 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (3,624,443 | ) | |
| (3,624,443 | ) |
| Balance, December 31, 2024 | |
| 12,242,481 | | |
$ | 1,224 | | |
$ | 16,215,492 | | |
$ | (17,248,804 | ) | |
$ | (1,032,088 | ) |
| | |
Common Stock | | |
Additional
paid-in | | |
Accumulated | | |
Total
Stockholders’ | |
| | |
Shares | | |
Amount | | |
capital | | |
Deficit | | |
Equity | |
| Balance, July 1, 2023 | |
| 12,817,500 | | |
$ | 1,282 | | |
$ | 15,171,074 | | |
$ | (9,062,066 | ) | |
$ | 6,110,290 | |
| Repurchase of common stock | |
| (649,570 | ) | |
| (65 | ) | |
| (3,936 | ) | |
| - | | |
| (4,001 | ) |
| Stock-based compensation | |
| - | | |
| - | | |
| 376,496 | | |
| - | | |
| 376,496 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (2,610,829 | ) | |
| (2,610,829 | ) |
| Balance, December 31, 2023 | |
| 12,167,930 | | |
$ | 1,217 | | |
$ | 15,543,634 | | |
$ | (11,672,895 | ) | |
$ | 3,871,956 | |
The
accompanying notes are an integral part of these financial statements
Aeluma,
Inc. and Subsidiary
Consolidated
Statements of Cash Flows (unaudited)
| | |
Six Months Ended
December 31, | |
| | |
2024 | | |
2023 | |
| Operating activities: | |
| | |
| |
| Net loss | |
$ | (3,624,443 | ) | |
$ | (2,610,829 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Amortization of deferred compensation | |
| 13,962 | | |
| 18,938 | |
| Stock-based compensation expense | |
| 316,194 | | |
| 376,496 | |
| Depreciation and amortization expense | |
| 202,306 | | |
| 131,783 | |
| Amortization of discount on convertible notes | |
| 427,819 | | |
| - | |
| Changes in fair value of derivative liabilities | |
| 2,855,045 | | |
| - | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Change in accounts receivable | |
| (1,264,628 | ) | |
| (3,753 | ) |
| Change in prepaids and other current assets | |
| (114,670 | ) | |
| (135,704 | ) |
| Change in accounts payable | |
| (134,305 | ) | |
| (298,974 | ) |
| Change in accrued expenses and other current liabilities | |
| (9,496 | ) | |
| 41,698 | |
| Net cash used in operating activities | |
| (1,332,216 | ) | |
| (2,480,345 | ) |
| Investing activities: | |
| | | |
| | |
| Purchase of equipment | |
| (40,797 | ) | |
| (164,290 | ) |
| Net cash used in investing activities | |
| (40,797 | ) | |
| (164,290 | ) |
| Financing activities: | |
| | | |
| | |
| Repurchase of common stock | |
| - | | |
| (4,001 | ) |
| Proceeds from convertible notes issuance | |
| 3,145,000 | | |
| - | |
| Net cash provided by (used in) financing activities | |
| 3,145,000 | | |
| (4,001 | ) |
| Net change in cash | |
| 1,771,987 | | |
| (2,648,636 | ) |
| Cash, beginning of period | |
| 1,291,072 | | |
| 5,071,690 | |
| Cash, end of period | |
$ | 3,063,059 | | |
$ | 2,423,054 | |
The
accompanying notes are an integral part of these financial statements
Aeluma,
Inc. and Subsidiary
Notes
to Consolidated Financial Statements (unaudited)
Note
1 – The Company
Aeluma
develops novel optoelectronic and electronic devices for sensing, communication, and computing applications. Aeluma has pioneered a technique
to produce semiconductor materials and chips using high-performance compound semiconductors on large diameter substrates that are commonly
used to manufacture mass market microelectronics. This enables cost-effective manufacturing of high-performance photodetectors and photodetector
arrays for imaging applications in mobile devices, as well as other applications. Aeluma’s technology is broadly applicable across
mobile, automotive, AI, defense & aerospace, communication, AR/VR, high-performance computing, and quantum computing. Aeluma is based
in Goleta, California, where the Company operates in a 9,000 sq. ft. facility with a state-of-the-art R&D/manufacturing cleanroom
and access to world-class rapid prototyping capabilities. The facility houses unique equipment for scalable manufacturing. Aeluma also
partners with production-scale fabrication foundries and packaging companies. Aeluma maintains extensive patent protection and trade
secrets that relate to its materials, manufacturing technology and applications.
Going
Concern
The
Company incurred a net loss of $3,624,443 and $2,610,829 for the six months ended December 31, 2024 and 2023, respectively, and has accumulated
deficit of $17,248,804 at December 31, 2024. In addition, the Company is in the research and development stage and has generated limited
revenue to date. In order to support its operations, the Company will require additional infusions of cash from the sale of equity instruments
or the issuance of debt instruments, or the commencement of profitable revenue generating activities. If adequate funds are not available
or are not available on acceptable terms, the Company’s ability to fund its operations, develop or enhance its sensors in the future
or respond to competitive pressures would be significantly limited. Such limitations could require the Company to curtail, suspend or
discontinue parts of its business plan.
These
conditions raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been
prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”), which contemplate continuation of the
Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty. The
financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Note
2 – Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying consolidated financial statements have been presented in accordance with GAAP. The summary of significant accounting policies
presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying
notes are the representations of the Company’s management, who is responsible for the Company’s integrity and objectivity.
This Quarterly Report on Form 10-Q for the quarter ended December 31, 2024, should be read in conjunction with our Annual Report on Form
10-K for the fiscal year ended June 30, 2024. The accompanying consolidated financial statements and footnotes have been condensed and
therefore do not contain all disclosures required by GAAP. The interim financial data are unaudited; however, in the opinion of Aeluma,
Inc., the interim data include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of
the results for the interim periods. Results for interim periods are not necessarily indicative of those to be expected for the full
year.
Use
of Estimates and Assumptions
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that
it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values
of assets and liabilities. The actual results experienced by the Company may differ materially and adversely from the Company’s
estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will
be affected.
Reclassification
of Prior Year Presentation
Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported consolidated financial statements.
Cash
and Cash Equivalents
The
Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of three
months or less to be cash and cash equivalents.
Concentration
of Risk
The
Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced
any losses in such accounts. The Company’s accounts are insured by the FDIC but at times may exceed federally insured limits.
Convertible
Debt Instruments
The
Company evaluates agreements, including any convertible debt instruments to determine if those agreements or any embedded components
of those agreements qualify as derivative financial instruments to be separately accounted for in accordance with FASB ASC Topic 815 “Derivatives
and Hedging” (“ASC 815”). The accounting treatment of derivative financial instruments requires
that the Company record any bifurcated embedded features at their fair values as of the inception date of the agreement and at fair value
as of each subsequent balance sheet date. Any change in fair value is recorded in earnings as non-operating, non-cash income or expense.
The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as
a result of events during the period, the agreement is reclassified as of the date of the event that caused the reclassification.
Bifurcated embedded features are recorded at their initial fair values which create additional debt discount to the host instrument. The
Company amortizes the respective debt discount over the term of the notes, using the effective interest method. See Note 3 –
Convertible Notes.
Fair
Value of Financial Instruments
As
defined in Financial Accounting Standards Board (“FASB”) ASC Topic No. 820, “Fair Value Measurements and Disclosures”
(“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer the liability in an orderly
transaction between market participants at the measurement date. In determining fair value, the Company uses the market or income approach.
Based on this approach, the Company utilizes certain assumptions about the risk inherent in the inputs to the valuation technique. These
inputs can be readily observable, market-corroborated or generally unobservable inputs. The Company utilizes valuation techniques that
maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the
valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value
hierarchy ranks the quality and the reliability of the information used to determine fair values. As a basis for considering these assumptions,
ASC 820 defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value.
Level
1 – Unadjusted quoted prices in active, accessible market for identical assets or liabilities
Level
2 – Other inputs that are directly or indirectly observable in the marketplace
Level
3 – Unobservable inputs which are supported by little or no market activity
The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value.
The
carrying values of the Company’s cash, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate
their fair value due to the relatively short maturity of these items. Financial assets and liabilities measured on a non-recurring basis
are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried
and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are
those that are adjusted to fair value each time a financial statement is prepared.
For
recurring fair value measurement categorized within Level 3 assets and liabilities include those whose value is determined using market
standard valuation technique described below. When observable inputs are not available, the market standard techniques for determining
the estimated fair value of certain securities that trade infrequently, and therefore have little transparency, rely on inputs that are
significant to the estimated fair value and that are not observable in the market or cannot be derived principally from or corroborated
by observable market data. Management believes these inputs are based on assumptions deemed appropriate given the circumstances and consistent
with what other market participants would use when pricing similar assets and liabilities. The Company’s embedded derivatives are
classified in Level 3 using Black-Scholes option-pricing model since their values include significant unobservable inputs.
The
derivative liabilities are recognized at fair value on a recurring basis at December 31, 2024 and are Level 3 measurements. There have
been no transfers between levels.
| Fair Value of Embedded Derivatives | |
| |
| Beginning balance at July 1, 2024 | |
$ | - | |
| New derivative liabilities | |
| 2,193,129 | |
| Change in fair value of derivative liabilities | |
| 2,855,045 | |
| Ending balance at December 31, 2024 | |
$ | 5,048,174 | |
The
fair value of the embedded derivatives in our convertible notes at the balance sheet date were valued using the Black-Scholes option-pricing
model with the following assumptions:
| | |
December 31,
2024 | |
| Stock price | |
$ | 7.65 | |
| Expected volatility | |
| 128.3 | % |
| Expected term | |
| 1.5 years | |
| Dividend yield | |
| 0.00 | % |
| Risk-free interest rate | |
| 4.21 | % |
Property
and Equipment
Property,
equipment and leasehold improvements are reported at historical cost, net of accumulated depreciation and amortization. Depreciation
is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the
less of the remaining lease term or the estimated useful life of the improvements. Repairs and maintenance to these assets are charged
to expenses as incurred; major improvements enhancing the function and/or the asset’s useful life are capitalized. When items are
sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such
transactions are recognized.
Intangible
Assets
Intangible
assets are associated with the Aeluma.com domain name and are amortized on a straight-line basis over 10 years.
Revenue
Recognition
The
Company follows a five-step approach for recognizing revenue, consisting of the following: (1) identifying the contract with a customer;
(2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price
to the performance obligations in the contract; and (5) recognizing revenue when, or as, the entity satisfies a performance obligation.
Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Incidental items that
are immaterial in the context of the contract are recognized as expenses. The Company does not have any significant financing components
associated with its revenue contracts, as payment is received within one year.
| |
● |
Commercial product and
service contracts: Revenue is currently generated from multiple customers for research and development related services and small-volume
orders. |
| |
● |
Government contracts: Revenue
is principally generated under research and development contracts with agencies of the U.S. government or with prime contractors.
These contracts may include cost reimbursement and fixed firm price terms. |
For
the three and six months ended December 31, 2024, the Company was awarded two government contracts of $11,866,384 for providing
services and delivering materials. The awards are firm fixed contracts that shall be paid upon completion of performance and recognized
as revenue over an expected term of 36 months.
For
the three months ended December 31, 2024, the Company recognized its revenue of $1,612,519, of which $1,461,524 was from government contracts
and $150,995 was from product sales for sampling purposes or development. For the six months ended December 31, 2024, the Company recognized
its revenue of $2,093,254, of which $1,892,259 was from government contracts and $200,995 was from product sales for sampling purposes
or development. As of December 31, 2024, the aggregate amount to remaining performance obligations for the government contracts was $10,664,948.
Loss
Per Share
Basic
loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding
during the period. Diluted loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the
weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive
securities, comprised of stock warrants and stock options, are not reflected in diluted loss per share because such shares are anti–dilutive.
Dilutive impact of potential common shares resulting from common stock equivalents is determined by applying the treasury stock method.
Stock-Based
Compensation
The
Company accounts for stock-based compensation arrangements in accordance with guidance issued by the FASB, which requires the measurement
and recognition of compensation expense for all share-based payment awards made to employees, consultants, and directors based on estimated
fair values.
The
Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model. The value of
the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s
consolidated statements of operations. The Company estimates the fair value of stock-based compensation awards using the Black-Scholes
model. This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the
stock options, all of which are highly complex and subjective variables. For employees and directors, the expected life was calculated
based on the simplified method as described by the SEC Staff Accounting Bulletin No. 110, Share-Based Payment. For other service providers,
the expected life was calculated using the contractual term of the award. The Company’s estimate of expected volatility was based
on the volatility of peers. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities
with a maturity equivalent to the expected term of the options. The Company accounts for forfeitures upon occurrence.
Income
Taxes
The
Company is expected to have net operating loss carryforwards that it can use to offset a certain amount of taxable income in the future.
The Company is currently analyzing the amount of loss carryforwards that will be available to reduce future taxable income. The resulting
deferred tax assets will be offset by a valuation allowance due to the uncertainty of its realization. The primary difference between
income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic
federal statutory rates to income before income taxes relates to the recognition of a valuation allowance for deferred income tax assets.
The
Company has adopted FASB ASC 740-10, “Income Taxes” which clarifies the accounting for uncertainty in income
taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not as a measurement
process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making
this assessment, a Company must determine whether it is more likely than not that a tax position will be sustained upon examination,
based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The
Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and
penalties totaled $0 for the periods presented. The Company’s net operating loss carryforwards are subject to IRS examination
until they are fully utilized, and such tax years are closed.
The
Company will file tax returns in the U.S. federal jurisdiction and the state of California. The Company’s federal and state return
forms are subject to review by the taxing authorities. The Company is not currently under examination by any taxing authority, nor has
it been notified of an impending examination.
Recent
Accounting Pronouncements
The
Company has evaluated all issued but not yet effective accounting pronouncements and determined that they are either immaterial or not
relevant to the Company.
Note
3 – Convertible Notes
Between
August 5, 2024 and August 27, 2024, we issued convertible promissory notes in the aggregate principal amount of $3,145,000 to 10 accredited
investors, pursuant to a private note financing. The Notes mature in June 2026 and do not carry any interest. The Notes are convertible
into shares of the Company’s common stock par value $0.0001 per share (the “Common Stock”) upon the occurrence of certain
events, (i.e., qualified financing resulting in at least $5,000,000 to the Company, if the Common Stock is uplisted to a national securities
exchange or if neither of those such events occur prior to the maturity date, (together with Sale of the Company (as hereinafter defined),
a “Conversion Event”)). In the event the Company does not complete qualified financing or uplist at or before the maturity
date, the outstanding balance of the Notes shall automatically convert without any further action by the Holder into shares of the Company’s
common stock equal to eighty-five percent (85%) to the VWAP of the Common Stock on the OTC Markets for the five trading days immediately
prior to maturity date. The Note also provides that if there is a Sale of the Company, as defined in the Note, the Holder may elect to
receive a cash payment equal to the aggregate amount of principal then outstanding under such Holder’s Note or convert the Note
into shares of Common Stock equal to 85% of the VWAP of the Common Stock on the OTC Markets for the five trading days immediately prior
to the Sale of the Company. Although the conversion price is dependent upon the type of Conversion Event that occurs, the Note does carry
a ceiling and floor price: the applicable conversion price will not be lower than 85% of the 5-day VWAP on the applicable Closing Date
(the “Floor Price”) nor will the applicable conversion price be higher than $3.50 per share (the “Ceiling Price”);
the Floor Price and Ceiling Price shall automatically adjust in the event of a stock split or consolidation by the Company. Since the
Floor Price is tied to the Closing Date, the Floor Price may be different for investors that are part of different closings. The Floor
Price for the investors who participated in the closings is equal to $2.47 or $2.68 per share. The Investors were granted piggyback registration
rights for the shares of Common Stock underlying the Note.
The
Note Purchase Agreement also contains customary representation and warranties of the Company and the Investors, indemnification obligations
of the Company, termination provisions, and other obligations and rights of the parties.
The
Company analyzed the embedded features of the convertible notes and the debt discount is being amortized over the term of the convertible
notes using the effective interest method and the derivative liabilities are marked-to-market at each reporting date. See Fair
Value of Financial Instruments in Note 2 – Summary of Significant Accounting Policies for additional information.
As
of December 31, 2024, the Company’s convertible notes are as follows:
| Principal amounts of convertible notes | |
$ | 3,145,000 | |
| Less: unamortized debt discount | |
| (1,765,310 | ) |
| Convertible notes, net of discount | |
$ | 1,379,690 | |
Note
4 – Stockholders’ Equity
Authorized
Shares
The
Company’s Articles of Incorporation authorize the issuance of two classes of shares of stock. The total number of shares which
this corporation is authorized to issue is 50,000,000 shares of $0.0001 par value common stock and 10,000,000 of
$0.0001 par value preferred stock. No preferred shares were issued as of December 31, 2024.
Issued
and Vested Shares to Officers
On
October 27, 2020, the Company issued 1,623,920 shares of common stock to Jonathan Klamkin, Director and Chief Executive Officer
for $10,000. Initially 20% or 324,784 shares vested on October 27, 2020, and the remaining 1,299,136 shares vest in equal amounts, monthly
over the subsequent 4 years. The stock purchase agreement contains a repurchase option whereby unvested shares may be repurchased by
the Company, at the Company’s option. At December 31, 2024, all shares of Jonathan Klamkin vested.
Registration
Rights Agreement
The
Company entered into a registration rights agreement that provides for certain liquidated damages upon the occurrence of a “Registration
Event,” which is defined as the occurrence of any of the following events: (a) the Company fails to file with the Commission the
Registration Statement on or before the Registration Filing Date; (b) the Registration Statement is not declared effective by the Commission
on or before the Registration Effectiveness Date; (c) after the SEC Effective Date, the Registration Statement ceases for any reason
to remain effective or the Holders of Registrable Securities covered thereby are otherwise not permitted to utilize the prospectus therein
to resell the Registrable Securities covered thereby, except for Blackout Periods permitted herein; or (d) following the listing or inclusion
for quotation on an Approved Market, the Registrable Securities, if issued and outstanding, are not listed or included for quotation
on an Approved Market, or trading of the Common Stock is suspended or halted on the Approved Market, which at the time constitutes the
principal markets for the Common Stock, for more than three (3) full, consecutive Trading Days (other than as a result of (A) actions
or inactions of parties other than the Company or its affiliates or of the Approved Market not reasonably in the control of the Company,
or (B) suspension or halt of substantially all trading in equity securities (including the Common Stock) on the Approved Market). The
maximum amount of liquidated damages that may be paid by the Company shall be an amount equal to eight percent (8%) of the shares covered
by the registration rights agreement. This filing covered 11,010,002 shares. The Company currently expects to satisfy all of
its obligations under the Registration Agreement and does not expect to pay any damages pursuant to this agreement; therefore, no liability
has been recorded.
Note
5 – Stock-Based Compensation
Restricted
Stock Awards
In
June 2021, the Company sold 723,008 shares of common stock to certain individuals in exchange for future management advisory
services, for discounted prices price ranging from $.0104 to $.0195 per share. The shares are subject to restrictions that
allow for repurchase of the shares by the Company due to a termination of the service agreement or other certain provisions. This repurchase
right declines on a pro-rata basis over vesting periods (corresponding to the service period) ranging from 2-4 years. Related
to these issuances, the Company has recorded deferred compensation of $1,372,435 for the value of the shares in excess of the purchase
price paid by the advisors. The deferred compensation was expensed as consulting expense in the consolidated statements of operation
over the service period.
In
March 2022, the Company signed an agreement to issue 150,000 shares of common stock valued at $300,000 to a consultant
for providing consulting services to the Company for eighteen months. Related to these issuances, the Company has recorded deferred compensation
of $300,000, which was expensed as consulting expense in the consolidated statements of operation over the eighteen months.
For
the three months ended December 31, 2024 and 2023, $6,981 have been amortized in the consolidated statements of operations and, for the
six months ended December 31, 2024 and 2023, $13,962 and $18,938, respectively, have been amortized in the consolidated statements of
operations. At December 31, 2024, $6,171 of deferred compensation included in the balance sheets is expected to be expensed within six
months.
The
following is a schedule summarizing restricted stock awards for the periods indicated:
| | |
December 31, 2024 | |
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
Number of
Shares | | |
Weighted
Average
Grant Date
Fair Value
per Price | | |
Number of
Shares | | |
Weighted
Average
Grant Date
Fair Value
per Price | |
| Beginning balance | |
| 6,923 | | |
$ | 1.90 | | |
| 10,597 | | |
$ | 1.90 | |
| Issued | |
| - | | |
| - | | |
| - | | |
| - | |
| Vested | |
| (3,674 | ) | |
| 1.90 | | |
| (7,348 | ) | |
| 1.90 | |
| Forfeited | |
| - | | |
| - | | |
| - | | |
| - | |
| Ending balance | |
| 3,249 | | |
$ | 1.90 | | |
| 3,249 | | |
$ | 1.90 | |
| | |
December 31, 2023 | |
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
Number of
Shares | | |
Weighted
Average
Grant Date
Fair Value
per Price | | |
Number of
Shares | | |
Weighted
Average
Grant Date
Fair Value
per Price | |
| Beginning balance | |
| 21,619 | | |
$ | 1.90 | | |
| 75,293 | | |
$ | 1.97 | |
| Issued | |
| - | | |
| - | | |
| - | | |
| - | |
| Vested | |
| (3,675 | ) | |
| 1.90 | | |
| (57,349 | ) | |
| 1.99 | |
| Forfeited | |
| - | | |
| - | | |
| - | | |
| - | |
| Ending balance | |
| 17,944 | | |
$ | 1.90 | | |
| 17,944 | | |
$ | 1.90 | |
Stock
Options
During
the three months ended September 30, 2023, the Company issued 6,500 options to purchase common stock to consultants. The options
expire in 10 years and have an exercise prices that range from $2.90 to $3.90 with immediate vesting.
During
the three months ended December 31, 2023, the Company issued 7,000 options to purchase common stock to a consultant. The options
expire in 10 years and have an exercise price that ranges from $2.50 to $3.43 with immediate vesting.
During
the three months ended March 31, 2024, the Company issued 6,500 options to purchase common stock to consultants. The options
expire in 10 years and have an exercise prices that range from $2.99 to $3.50 with immediate vesting. During the three months ended March
31, 2024, the Company issued 100,821 options to purchase common stock to the board of directors. The options expire in 10 years and vest
in nine months with an exercise price of $2.99.
During
the three months ended September 30, 2024, the Company issued 12,000 options to purchase common stock to a consultant. The options expire
in 10 years and have vest equally in twelve months with an exercise price of $3.13.
During
the three months ended December 31, 2024, the Company issued 54,000 options to purchase common stock to consultants. The options expire
in 10 years and have an exercise prices that range from $2.97 to $3.51 with vesting periods from six months to two years.
The
Company estimates the fair value of each option award using the Black-Scholes option-pricing model. The Company used the following assumptions
for to estimate the fair value of stock options for the period presented:
| | |
Six Months Ended
December 31, | |
| | |
2024 | | |
2023 | |
| Weighted-average fair value | |
$ | 1.89 | | |
$ | 2.48 | |
| Expected volatility | |
| 113.9% - 122.4 | % | |
| 104.9% - 106.6 | % |
| Expected term | |
| 1.0 years - 5.3 years | | |
| 5.0 years - 6.2 years | |
| Dividend yield | |
| 0.00 | % | |
| 0.00 | % |
| Risk-free interest rate | |
| 3.87% - 4.31 | % | |
| 3.94% - 4.92 | % |
For
the three months ended December 31, 2024 and 2023, stock-based compensation expenses for options granted were $149,103 and $135,919,
respectively. For the six months ended December 31, 2024 and 2023, stock-based compensation expenses for options granted were $316,194
and $376,496, respectively Unrecognized stock-based compensation expense was $620,570 and the average expected recognition period was
1.0 years as of December 31, 2024.
The
following is a schedule summarizing stock option activities for the periods presented:
Three
Months Ended
| | |
Number of
Options | | |
Weighted
Average
Exercise Price | | |
Aggregate
Intrinsic
Value (1) | |
| Outstanding at October 1, 2024 | |
| 1,056,487 | | |
$ | 2.42 | | |
$ | 794,863 | |
| Granted | |
| 54,000 | | |
| 3.12 | | |
| | |
| Exercised | |
| (155,666 | ) | |
| 2.11 | | |
| | |
| Expired/forfeited | |
| - | | |
| - | | |
| | |
| Outstanding at December 31, 2024 | |
| 954,821 | | |
$ | 2.51 | | |
$ | 4,908,085 | |
| Exercisable at December 31, 2024 | |
| 665,348 | | |
$ | 2.44 | | |
$ | 3,469,609 | |
| | |
| | | |
| | | |
| | |
| Outstanding at October 1, 2023 | |
| 995,500 | | |
$ | 2.33 | | |
$ | 965,500 | |
| Granted | |
| 7,000 | | |
| 2.90 | | |
| | |
| Exercised | |
| - | | |
| - | | |
| | |
| Expired/forfeited | |
| (41,375 | ) | |
| 2.09 | | |
| | |
| Outstanding at December 31, 2023 | |
| 961,125 | | |
$ | 2.35 | | |
$ | 566,485 | |
| Exercisable at December 31, 2023 | |
| 481,560 | | |
$ | 2.20 | | |
$ | 350,521 | |
| (1) | Represents
the excess of the fair value on the last day of period (which was $7.65 and $2.90 as of December 31, 2024 and 2023, respectively) over
the exercise price, multiplied by the number of options. |
Six
Months Ended
| | |
Number of
Options | | |
Weighted
Average
Exercise Price | | |
Aggregate
Intrinsic
Value (1) | |
| Outstanding at July 1, 2024 | |
| 1,068,000 | | |
$ | 2.41 | | |
$ | 1,257,520 | |
| Granted | |
| 66,000 | | |
| 3.12 | | |
| | |
| Exercised | |
| (155,666 | ) | |
| 2.11 | | |
| | |
| Expired/forfeited | |
| (23,959 | ) | |
| 2.39 | | |
| | |
| Outstanding at December 31, 2024 | |
| 954,821 | | |
$ | 2.51 | | |
$ | 4,908,085 | |
| Exercisable at December 31, 2024 | |
| 665,348 | | |
$ | 2.44 | | |
$ | 3,469,609 | |
| | |
| | | |
| | | |
| | |
| Outstanding at July 1, 2023 | |
| 1,034,000 | | |
$ | 2.31 | | |
$ | 639,775 | |
| Granted | |
| 13,500 | | |
| 3.11 | | |
| | |
| Exercised | |
| - | | |
| - | | |
| | |
| Expired/forfeited | |
| (86,375 | ) | |
| 2.04 | | |
| | |
| Outstanding at December 31, 2023 | |
| 961,125 | | |
$ | 2.35 | | |
$ | 566,485 | |
| Exercisable at December 31, 2023 | |
| 481,560 | | |
$ | 2.20 | | |
$ | 350,521 | |
| (1) | Represents
the excess of the fair value on the last day of period (which was $7.65 and $2.90 as of December 31, 2024 and 2023, respectively) over
the exercise price, multiplied by the number of options. |
Note
6 – Facility Operating Lease
On
April 1, 2021, the Company commenced a 5-year operating lease for a facility in Santa Barbara, California with total lease payments of
$781,813. The Company determined the lease constitutes a Right of Use (ROU) asset and has recorded the present value of the lease
payments as an asset and liability per ASC 842. The lease agreement waived the first three months of rent with payments commencing July
1, 2021. At the commencement of the lease, the net present value of the lease payments was $767,553. In addition to these lease payments,
the Company is also responsible for its shares of common area operating expenses and electricity. Such expenses are considered variable
costs and are not included in the measurement of the lease liability. The lease agreement also provides for the option to extend the
lease for two additional sixty-month periods. On July 1, 2023, one of the two options to extend was considered reasonably certain of
exercise and the Company remeasured the ROU asset and lease liability. The Company recorded the net present value of $1,189,606 for both
the ROU asset and lease liability on July 1, 2023.
The
following table presents maturities of operating lease liabilities on an undiscounted basis as of December 31, 2024:
| For the years ending June 30, | |
| |
| Remainder of 2025 | |
$ | 85,138 | |
| 2026 | |
| 173,454 | |
| 2027 | |
| 177,791 | |
| 2028 | |
| 182,235 | |
| 2029 | |
| 186,791 | |
| Thereafter | |
| 337,732 | |
| Total | |
| 1,143,141 | |
| Less imputed interest | |
| (136,405 | ) |
| Total lease liability | |
| 1,006,736 | |
| Less: lease liability, current portion | |
| 133,460 | |
| Lease liability, long term portion | |
$ | 873,276 | |
The
lease term and the discount rate for the lease at December 31, 2024 is 6.3 years and 4.00%, respectively. The total lease expenses were
$41,441 and $49,344 for the three months ended December 31, 2024 and 2023, respectively, and $82,882 and $94,258 for the six months ended
December 31, 2024 and 2023, respectively. The variable costs for common area operating expenses and electricity were $54,480 and $58,800
for the three months ended December 31, 2024 and 2023, respectively and $138,015 and $151,846 for the six months ended December 31, 2024
and 2023, respectively.
Note
7 – Warrants to Purchase Common Stock
In
connection with the Offering held from December 2022 through May 2023, the Company issued warrants of 85,653 to purchase common stock
to the Placement Agents. The warrants carry a term of 5 years and an exercise price of $3.00.
The
following warrants to purchase common stock were outstanding as of December 31, 2024:
| Number of Shares | | |
Exercise Price | | |
Expiration Date |
| | 286,672 | | |
$ | 2.00 | | |
June 22, 2026 |
| | 37,433 | | |
| 2.00 | | |
June 28, 2026 |
| | 11,500 | | |
| 2.00 | | |
July 1, 2026 |
| | 27,032 | | |
| 3.00 | | |
December 22, 2027 |
| | 4,588 | | |
| 3.00 | | |
January 10, 2028 |
| | 6,720 | | |
| 3.00 | | |
March 31, 2028 |
| | 44,933 | | |
| 3.00 | | |
May 10, 2028 |
| | 418,878 | | |
| | | |
|
Note
8 – Concentration of Credit Risk and Significant Customers
The
Company manages its credit risk associated with exposure to its direct customers on outstanding accounts receivable through the application
of credit approvals and other monitoring procedures. The Company closely monitors the aging of accounts receivable from its direct customers.
Significant customers are those that represent 10% or more of revenue or accounts receivable.
Total
revenues, by percentage, from individual customers representing 10% or more of total revenues in the respective periods were as follows:
| | |
Three Months Ended December 31 | | |
Six Months Ended December 31, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Customer A | |
| * | | |
| 46.8 | % | |
| 11.4 | % | |
| 41.6 | % |
| Customer B | |
| * | | |
| 53.2 | % | |
| * | | |
| 47.4 | % |
| Customer C | |
| * | | |
| * | | |
| * | | |
| * | |
| Customer D | |
| * | | |
| * | | |
| * | | |
| * | |
| Customer E | |
| 76.2 | % | |
| * | | |
| 58.7 | % | |
| * | |
| Customer F | |
| * | | |
| * | | |
| * | | |
| 11.0 | % |
| Customer G | |
| * | | |
| * | | |
| * | | |
| * | |
Accounts
receivable, by percentage, from individual customers representing 10% or more of accounts receivable are set forth in the following table:
| | |
As of | |
| | |
December 31, 2024 | | |
June 30,
2023 | |
| Customer A | |
| * | | |
| * | |
| Customer B | |
| * | | |
| * | |
| Customer C | |
| * | | |
| 18.3 | % |
| Customer D | |
| * | | |
| 27.7 | % |
| Customer E | |
| 80.2 | % | |
| * | |
| Customer F | |
| * | | |
| * | |
| Customer G | |
| 11.4 | % | |
| 53.9 | % |
Customer
A, B, C, D and E are government agencies.
Note
9 – Subsequent Event
The
Company has evaluated subsequent events through the filing date or the issuance of these financial statements and is not aware of any
material items that would require disclosure in the notes to the financial statements or would be required to be recognized as of December
31, 2024.
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless
otherwise stated or the context otherwise indicates, references to “Aeluma,” the “Company,” “we,”
“our,” “us,” or similar terms refer to Aeluma, Inc. and Subsidiary.
You
should read the following discussion and analysis of our financial condition and results of operations together with our consolidated
financial statements and the related notes and other financial information included in this report. Some of the information contained
in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for
our business, includes forward-looking statements that involve risks and uncertainties. You should review the disclosure under the heading
“Risk Factors” in other filings we make with the SEC for a discussion of important factors that could cause actual results
to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion
and analysis. You should not place undue reliance on forward-looking statements as predictive of future results.
Overview
Aeluma
develops novel optoelectronic and electronic devices for sensing, communication, and computing applications. Aeluma has pioneered a technique
to produce semiconductor materials and chips using high-performance compound semiconductors on large diameter substrates that are commonly
used to manufacture mass market microelectronics. This enables cost effective manufacturing of high-performance photodetectors and photodetector
arrays for imaging applications in mobile devices, as well as other applications. Aeluma’s technology has the potential to impact
a broad range of market verticals. Aeluma is based in Goleta, California, where the Company operates in a 9,000 sq. ft. facility with
a state-of-the-art R&D/manufacturing cleanroom and access to world-class rapid prototyping capabilities. The facility houses unique
equipment for scalable manufacturing. Aeluma also partners with production-scale fabrication foundries and packaging companies. Aeluma
maintains extensive patent protection and trade secrets that relate to its materials, manufacturing technology and applications.
Aeluma
is a transformative semiconductor company specializing in high-performance technology that scales. Applications include mobile, automotive,
AI, defense & aerospace, communication, AR/VR, high-performance commuting, and quantum computing. Aeluma aims to break out of traditional
manufacturing to expand the reach of its technology into mass markets. The demand for higher performance semiconductors in consumer markets
is increasing (https://www.marketsandmarkets.com/Market-Reports/shortwave-ir-market-52975079.html). Aeluma’s disruptive technology
is scalable, cost effective, while not sacrificing performance.
Additionally,
Aeluma’s technology may be used to manufacture other electronic and optoelectronic devices including lasers, transistors, and solar
cells.
Recent
Government Contract
On
September 6, 2024, the Company won $11.717 million DARPA contract for nano-scale semiconductors to develop heterogeneous integration
technology compatible with leading edge and future advanced-node semiconductors. Technology applications include AI, mobile devices and
5G/6G. This DARPA contract to Aeluma is structured with $5.974 million provided over 18 months, and the $5.743 million balance
provided over the following 18 months as Aeluma meets certain milestones. Teledyne Scientific Company, the Central Research Laboratory
of Teledyne, is a proposed subcontractor to assist with defining target materials and with developing strategies for demonstrating
program metrics. The University of California Santa Barbara is also a proposed subcontractor to support the implementation of test devices.
Private
Placements
Between
August 5, 2024 and August 27, 2024, we issued convertible promissory notes in the aggregate principal amount of $3,145,000 to 10 accredited
investors, pursuant to a private note financing. The Notes mature in June 2026 and do not carry any interest. The Notes are convertible
into shares of the Company’s common stock par value $0.0001 per share (the “Common Stock”) upon the occurrence of certain
events, (i.e., qualified financing resulting in at least $5,000,000 to the Company, if the Common Stock is uplisted to a national securities
exchange or if neither of those such events occur prior to the maturity date, (together with Sale of the Company (as hereinafter defined),
a “Conversion Event”)). In the event the Company does not complete qualified financing or uplist at or before the maturity
date, the outstanding balance of the Notes shall automatically convert without any further action by the Holder into shares of the Company’s
common stock equal to eighty-five percent (85%) to the VWAP of the Common Stock on the OTC Markets for the five trading days immediately
prior to maturity date. The Note also provides that if there is a Sale of the Company, as defined in the Note, the Holder may elect to
receive a cash payment equal to the aggregate amount of principal then outstanding under such Holder’s Note or convert the Note
into shares of Common Stock equal to 85% of the VWAP of the Common Stock on the OTC Markets for the five trading days immediately prior
to the Sale of the Company. Although the conversion price is dependent upon the type of Conversion Event that occurs, the Note does carry
a ceiling and floor price: the applicable conversion price will not be lower than 85% of the 5-day VWAP on the applicable Closing Date
(the “Floor Price”) nor will the applicable conversion price be higher than $3.50 per share (the “Ceiling Price”);
the Floor Price and Ceiling Price shall automatically adjust in the event of a stock split or consolidation by the Company. The Floor
Price for the investors who participated in this initial closing is equal to $2.68 per share. Since the Floor Price is tied to the Closing
Date, the Floor Price may be different for investors that are part of a different closing, should the Company hold additional closings.
The Investors were granted piggyback registration rights for the shares of Common Stock underlying the Note.
The
Note Purchase Agreement (“NPA”) also contains customary representation and warranties of the Company and the Investors, indemnification
obligations of the Company, termination provisions, and other obligations and rights of the parties.
The
foregoing description of the NPA and the Note is qualified by reference to the full text of the forms of NPA and Note, which are filed
as Exhibits hereto and incorporated herein by reference.
Plan
of Operations
Our
technology is based on heterogeneous integration of compound semiconductor materials on large-diameter substrates such as silicon. This
heterogeneous integration enables the subsequent device fabrication and manufacturing in large-scale manufacturing environments that
are suited to mass markets.
We
will continue to develop our technology that includes novel materials and devices based on our core intellectual property. Our primary
focus is to manufacture high-performance semiconductor technologies that scale for mass markets. Aeluma operates an R&D/manufacturing
facilities at its headquarters in Goleta, California, and has developed relationships with volume fabrication foundries and packaging
partners. We will continue to mature our manufacturing processes to further our commercialization traction. We have generated revenue
through various customer and government contracts, including small-volume orders, engineering sample evaluations, non-recurring engineering
(NRE) development efforts, and R&D projects. We will continue to perform on these various efforts, expand our business development
and marketing efforts, further engage with our manufacturing partners, and continue our efforts toward volume production and commercialization.
We expect to rely on such external capabilities to scale our production capacity in support of high-volume markets.
Limited
Operating History
We
cannot guarantee that the proceeds from the Offering will be sufficient to carry out all of our business plans. Our business is subject
to risks inherent in growing an enterprise, including limited capital resources, risks inherent in the research and development process
and possible rejection of our products in development.
If
financing is not available on satisfactory terms, we may be unable to carry out all of our operations. Equity financing will result in
dilution to existing stockholders.
Components
of Results of Operations
Revenue
Our
revenue currently consists of commercial product sales and government contracts.
Operating
Expenses
Cost
of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide deliverables that resulted
in payment of our success fee and wafers delivered. We anticipate that our cost of revenue will vary substantially depending on the nature
of products and/or services delivered in each customer engagement.
Research
and development expenses consist primarily of compensation and related costs for personnel, including stock-based compensation and employee
benefits, costs associated with design, fabrication, packaging and testing of our devices, and facility lease and utility expenses. We
expense research and development expenses as incurred.
General
and administrative expenses consist primarily of compensation and related costs for personnel, including stock-based compensation and
employee benefits. In addition, general and administrative expenses include third-party consulting, legal, insurance, audit and
accounting services, and office lease and utility expenses.
Other
Income (Expense)
Interest
income consists primarily of interest earned in interest-bearing savings account in bank.
Amortization
of discount on convertible notes represents the non-cash interest expense associated with the amortization of convertible notes issued
to our debtholders.
Changes
in the fair value of derivative liabilities reflect valuation changes in the derivatives held by the Company.
Income
Tax Expense
Income
tax expense consists primarily of income taxes in certain state jurisdictions in which we conduct business.
Results
of Operations
Our
results of operations for the six months ended December 31, 2024, as compared to the same period of 2023, were as follows:
| | |
Six Months Ended December 31, | |
| | |
2024 | | |
2023 | | |
$ Change | | |
% Change | |
| Revenue | |
$ | 2,093,254 | | |
$ | 295,392 | | |
$ | 1,797,862 | | |
| n/m | |
| Operating expenses | |
| (2,435,036 | ) | |
| (2,906,902 | ) | |
| 471,866 | | |
| 16.2 | % |
| Other income (expense) | |
| (3,282,661 | ) | |
| 681 | | |
| (3,283,342 | ) | |
| n/m | |
| Loss before income tax expense | |
| (3,624,443 | ) | |
| (2,610,829 | ) | |
| (1,013,614 | ) | |
| -38.8 | % |
| Income tax expense | |
| - | | |
| - | | |
| - | | |
| - | |
| Net loss | |
$ | (3,624,443 | ) | |
$ | (2,610,829 | ) | |
$ | (1,013,614 | ) | |
| -38.8 | % |
Revenue:
Revenue increased $1,797,862 to $2,093,254, of which $1,892,261 was from government contracts and $200,993 was from commercial product
and service contract, for the six months ended December 31, 2024 from $295,392 of which $262,992 was from government contracts and $32,400
was from commercial product and service contract, for the same period in 2023.
Operating
expenses: Operating expenses decreased $471,866, or 16.2%, to $2,435,036 for the six months ended December 31, 2024 from $2,906,902
for the same period in 2023, due primarily to decreases in consulting and professional expenses and less purchases for R&D activities.
Other
income (expense): Other income (expense) consists of amortization of discount on convertible notes of ($427,819), changes in fair
value of derivative liabilities of ($2,855,045) and interest income of $203 for the six months ended December 31, 2024.
Income
tax expense: We did not record income tax expense for either of the six months ended December 31, 2024 and 2023.
Capital
Resources and Liquidity
Our
financial statements have been presented on the basis that are a going concern, which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. As presented in the financial statements, we incurred a net loss of $3,624,443 and $2,610,829
for the six months ended December 31, 2024 and 2023, respectively, and losses are expected to continue in the near term. The accumulated
deficit was $17,248,804 at December 31, 2024. We have been funding our operations through the sale of convertible notes and common stock
in private placement transactions.
Management
anticipates that significant additional expenditures will be necessary to develop and expand our business before significant positive
operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital
and to ultimately achieve sustainable revenues and profitable operations. At December 31, 2024, we had $3,063,059 of cash and cash equivalents.
These funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through
the issuance of debt or equity securities for cash to operate our business. No assurance can be given that any future financing will
be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing,
it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders,
in the case of equity financing.
Management
has undertaken steps as part of a plan to improve operations with the goal of sustaining our operations for the next twelve months and
beyond. These steps include (a) raising additional capital and/or obtaining financing; (b) controlling overhead and expenses; (c) executing
material sales or research contracts; and (d) pursuing additional sales and contracts. There can be no assurance that we can successfully
accomplish these steps and it is uncertain that we will achieve a profitable level of operations and obtain additional financing. There
can be no assurance that any additional financing will be available to us on satisfactory terms and conditions, if at all. As of the
date of this Report, we have not entered into any formal agreements regarding the above.
In
the event we are unable to continue as a going concern, the Company may elect or be required to seek protection from its creditors by
filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered
this alternative, nor does management view it as a likely occurrence.
We
had working capital of $4,041,363 and $766,160 at December 31, 2024 and June 30, 2024, respectively. Current assets increased $3,137,323
to $4,530,169 at December 31, 2024 from $1,392,846 at December 31, 2024, primarily due to a $1,771,987 increase in cash and a $1,264,628
increase in accounts receivable. Current liabilities decreased $137,880 to $488,806 at December 31, 2024 from $626,686 at June 30, 2024,
due primarily to decrease in accounts payable.
The
following table shows a summary of our cash flows for the periods presented:
| | |
Six Months Ended December 31, | |
| | |
2024 | | |
2023 | | |
$ Change | | |
% Change | |
| Net cash provided by (used in) | |
| | |
| | |
| | |
| |
| Operating activities | |
$ | (1,332,216 | ) | |
$ | (2,480,345 | ) | |
$ | 1,148,129 | | |
| -46.3 | % |
| Investing activities | |
| (40,797 | ) | |
| (164,290 | ) | |
| 123,493 | | |
| -75.2 | % |
| Financing activities | |
| 3,145,000 | | |
| (4,001 | ) | |
| 3,149,001 | | |
| n/m | |
| Increase (decrease) in cash | |
$ | 1,771,987 | | |
$ | (2,648,636 | ) | |
$ | 4,420,623 | | |
| -166.9 | % |
Net
cash used in our operating activities were $1,332,216 and $2,480,345 for the six months ended December 31, 2024 and 2023, respectively,
due primarily to net losses of $3,624,443 and $2,610,829 for the six months ended December 31, 2024 and 2023, respectively.
Net
cash used in our investing activities was $40,797 and $164,290 for the six months ended December 31, 2024 and 2023, respectively. Investing
activities include purchase of equipment.
Net
cash provided by our financing activities was $3,145,000 for the six months ended December 31, 2024 and net cash used in our financing
activities was $4,001 for the same period of 2023. We received $3,145,000 from issuing convertible notes for the six months ended December
31, 2024 and paid $4,001 to purchase unvested restricted shares for the same period of 2023.
Critical
Accounting Policies
During
the three and six months ended December 31, 2024, there were no significant changes in our critical accounting policies.
Item
3. Quantitative and Qualitative Disclosures about Market Risk
Not
applicable.
Item
4. Controls and Procedures
Inherent
Limitations on Effectiveness of Controls
Our
management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and
procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter
how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will
be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud,
if any, have been detected.
Evaluation
of Disclosure Controls and Procedures
Our
disclosure controls and procedures are designed to ensure that information we are required to disclose in reports we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,
and that such information is accumulated and communicated to our management, including our principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance.
Our
management, with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered
by this Report. Based on this evaluation, management, including our chief executive officer and our chief financial officer, concluded
that as of December 31, 2024, our disclosure controls and procedures were not effective. Our current staffing resources in our finance
department are insufficient to support the complexity of our financial reporting requirements. As a result, we have had an inadequate
level of precision, evidence or timeliness in the performance of review controls.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) during the six months ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
Part
II - Other Information
Item
1. Legal Proceedings
From
time to time, we may become a party to litigation or other legal proceedings that it considers to be a part of the ordinary course of
its business. To the best of our knowledge, we are not currently involved in any legal proceedings that could reasonably be expected
to have a material adverse effect on our business, prospects, financial condition or results of operations; however, we may become involved
in material legal proceedings in the future.
Item
1A. Risk Factors
We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to
provide the information under this item.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
We
did not sell any equity securities which were not registered under the Securities Act during the quarter ended December 31, 2024 that
were not otherwise disclosed in our Current Reports on Form 8-K.
Item
3. Defaults upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not
applicable.
Item 5.
Other Information
Insider
Trading Arrangements and Related Disclosure
During
the three months ended December 31, 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement”
or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 6.
EXHIBITS
| Exhibit No. |
|
Description |
| 2.1 |
|
Agreement
and Plan of Merger and Reorganization among Parc Investments, Inc., Aeluma Operating Co. and Biond Photonics, Inc. (incorporated
by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 3.1 |
|
Certificate
of Merger relating to the merger of Aeluma Operating Co. with and into Biond Photonics, Inc., filed with the Secretary of State of
the State of California on June 22, 2021 (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 3.2 |
|
Amended
and Restated certificate of incorporation, filed with the Secretary of State of the State of Delaware on June 22, 2021 (incorporated
by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 3.3 |
|
Amended
and Restated Bylaws. (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 4.1 |
|
Form
of Lock Up Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 4.2 |
|
Form
of Placement Agent Warrant (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 4.3 |
|
Description
of Securities (incorporated by reference to the annual Report on Form 10-K filed on September 25, 2023) |
| 10.2 |
|
Form
of Post-Merger Indemnification Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 10.3 |
|
Form
of Pre-Merger Indemnification Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 10.4 |
|
Form
of Subscription Agreement, dated June 22, 2021, by and between the Company and the parties thereto (incorporated by reference to
the Current Report on Form 8-K filed on June 28, 2021) (incorporated by reference to the Current Report on Form 8-K filed on June
28, 2021) |
| 10.5 |
|
Registration
Rights Agreement, dated June 22, 2021, by and between the Company and the parties thereto (incorporated by reference to the Current
Report on Form 8-K filed on June 28, 2021) |
| 10.6+ |
|
2021
Equity Incentive Plan and form of award agreements (incorporated by reference to the Current Report on Form 8-K filed on June 28,
2021) |
| 10.7 |
|
Restricted
Stock Purchase Agreement between Biond Photonics, Inc. and Mr. Klamkin (incorporated by reference to the Registration Statement on
Form S-1/A filed on October 15, 2021) |
| 10.9 |
|
Advisor
Restricted Stock Purchase Agreement between Biond Photonics, Inc. and Mr. DenBaars, dated December 21, 2020 (incorporated by reference
to the Registration Statement on Form S-1/A filed on October 15, 2021) |
| 10.10 |
|
Advisor
Restricted Stock Purchase Agreement between Biond Photonics, Inc. and Mr. DenBaars, dated June 10, 2021 (incorporated by reference
to the Registration Statement on Form S-1/A filed on October 15, 2021) |
| 10.11 |
|
Advisory
Agreement between Biond Photonics, Inc. and Mr. DenBaars, dated December 31, 2020 (incorporated by reference to the Registration
Statement on Form S-1/A filed on October 15, 2021) |
| 10.12 |
|
Advisory
Agreement between Biond Photonics, Inc. and Mr. DenBaars, dated June 10, 2021 (incorporated by reference to the Registration Statement
on Form S-1/A filed on October 15, 2021) |
| 10.14 |
|
Director
Agreement by and between the Company and John Paglia (incorporated by reference to the Current Report on Form 8-K filed on November
30, 2021) |
| 10.15 |
|
Subscription
Agreement (incorporated by reference to the Current Report on Form 8-K filed on December 23, 2022) |
| 10.16 |
|
Registration
Rights Agreement (incorporated by reference to the Current Report on Form 8-K filed on December 23, 2022) |
| 10.17 |
|
Form
of Note Purchase Agreement (incorporated by reference to the Current Report on Form 8-K filed on August 30, 2024) |
| 10.18 |
|
Form
of Note (incorporated by reference to the Current Report on Form 8-K filed on August 30, 2024) |
| 10.19 |
|
Independent
Director Agreement with Craig Ensley, effective as of December 14, 2023 (Incorporated by reference to the Registration Statement
on Form S-1/A filed on October 7, 2024) |
| 14.1 |
|
Code
of Ethics (incorporated by reference to the annual Report on Form 10-K filed on September 25, 2023) |
| 16.1 |
|
Reserved. |
| 21.1 |
|
Subsidiaries
of the Registrant (Incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021) |
| 31.1 |
|
Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 |
| 31.2 |
|
Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 |
| 32.1 |
|
Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
| 32.2 |
|
Certification of Principal Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
| 97.1 |
|
Policy
Relating to Recovery of Erroneously Awarded Compensation (incorporated by reference to the Annual Report on Form 10-K on September
27, 2024 |
| 101.INS |
|
Inline XBRL Instance Document
|
| 101.SCH |
|
Inline XBRL Taxonomy Extension
Schema Document. |
| 101.CAL |
|
Inline XBRL Taxonomy Extension
Calculation Linkbase Document. |
| 101.DEF |
|
Inline XBRL Taxonomy Extension
Definition Linkbase Document. |
| 101.LAB |
|
Inline XBRL Taxonomy Extension
Label Linkbase Document. |
| 101.PRE |
|
Inline XBRL Taxonomy Extension
Presentation Linkbase Document. |
| 104 |
|
Cover Page Interactive
Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| + | Indicates
a management contract or compensatory plan, contract, or arrangement. |
| * | In
accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32.1 herewith
are deemed to accompany this Form 10-K and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications
will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of
the undersigned thereunto duly authorized.
| |
Aeluma,
Inc. |
| |
|
|
| Date: February 11, 2025 |
By: |
/s/
Jonathan Klamkin |
| |
Name: |
Jonathan Klamkin |
| |
Title: |
President, Chief Executive Officer and
Principal Financial Officer (Principal
Executive Officer and Principal Financial Officer) |
22
Aeluma (QB) (USOTC:ALMU)
과거 데이터 주식 차트
부터 2월(2) 2025 으로 3월(3) 2025
Aeluma (QB) (USOTC:ALMU)
과거 데이터 주식 차트
부터 3월(3) 2024 으로 3월(3) 2025
