# Aeluma, Inc.: Form 10-Q for the period ended Dec 31, 2023

- Company: [Aeluma, Inc.](/companies/almu.md) (CIK 1828805)
- Form: 10-Q
- Filed: 2024-02-12
- Accepted by EDGAR: Feb 12, 2024, 21:30 ET
- Period: 2023-12-31
- Accession: 0001213900-24-012610
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1828805/000121390024012610/f10q1223_aeluma.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1828805/000121390024012610/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-10-01 to 2023-12-31 | $263.0k | us-gaap:Revenues |
| Revenue | 6 months, 2023-07-01 to 2023-12-31 | $295.4k | us-gaap:Revenues |
| Cost of revenue | 3 months, 2023-10-01 to 2023-12-31 | $136.8k | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2023-07-01 to 2023-12-31 | $151.9k | us-gaap:CostOfRevenue |
| Research and development | 3 months, 2023-10-01 to 2023-12-31 | $651.1k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2023-07-01 to 2023-12-31 | $1.5m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2023-10-01 to 2023-12-31 | −$1.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-07-01 to 2023-12-31 | −$2.6m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2023-10-01 to 2023-12-31 | −$1.1m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-07-01 to 2023-12-31 | −$2.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-10-01 to 2023-12-31 | −$0.09 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-07-01 to 2023-12-31 | −$0.21 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-10-01 to 2023-12-31 | −$0.09 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-07-01 to 2023-12-31 | −$0.21 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-10-01 to 2023-12-31 | 12,167,930 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-07-01 to 2023-12-31 | 12,418,579 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-07-01 to 2023-12-31 | −$2.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-07-01 to 2023-12-31 | $164.3k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 6 months, 2023-07-01 to 2023-12-31 | $4.0k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-12-31 | $2.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-12-31 | $2.8m | us-gaap:AssetsCurrent |
| Total assets | at 2023-12-31 | $5.3m | us-gaap:Assets |
| Current liabilities | at 2023-12-31 | $450.9k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-12-31 | $1.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-12-31 | $3.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 14,977 characters.

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

We develop novel optoelectronic devices for sensing and communications applications. Aeluma has pioneered a technique to manufacture devices using high performance compound semiconductor materials on large-diameter substrates that are commonly used to manufacture mass market microelectronics. This enables cost effective manufacturing of high-performance photodetector array circuits for imaging applications in mobile devices, as well as other technologies. Photodetector devices may be used as image sensors that generate an image by detecting light, in a manner similar to a digital camera taking pictures. Our devices may incorporate additional functionality for 3D image capture when integrated into various system architectures. This technology has the potential to enhance the performance and capability of camera image sensors, light detection and ranging (LiDAR), augmented reality/virtual reality (AR/VR), facial recognition, and other applications. Aeluma has acquired key manufacturing equipment, and has headquarters in Goleta, California with a manufacturing cleanroom to house this equipment.

Because we will leverage compound semiconductor materials, our devices may operate out to longer wavelengths, up to at least 1600 nm, which is advantageous for a number of reasons including eye safety. Beyond 1400 nm is considered eye safe at significantly higher optical power levels relative to that at shorter wavelengths. Therefore, for LiDAR sensing systems, the range (the detectable object distance) can be increased significantly. Operating at specific longer wavelengths (for example, near 1550 nm) also enables imaging both in low light (dark) conditions, as well as in direct sunlight. Therefore, images could be captured outdoors and in various conditions.

### Private Placement

Between December 2022 and May 2023, we entered into subscription agreements (the “Subscription Agreement”) with certain accredited investors, pursuant to which we issued an aggregate of 2,017,498 shares of our common stock, par value $0.0001 per share, at a per share purchase price of $3.00, for aggregate gross proceeds of $6,052,500 (the “Offering”).

Pursuant to the Offering, we paid a cash placement agent fee of $389,200 and issued placement agent warrants to purchase up to 85,653 shares of common stock at an exercise price of $3.00 per share. We also agreed to pay certain expenses of the placement agent in connection with the Offering.

In connection with the Subscription Agreement, we also entered into a Registration Rights Agreement with the Investors, pursuant to which we agreed to register all of the shares of common stock issued in the Offering, including the shares of common stock underlying the warrant issued to the placement agent in this registration statement.

The closings of the Offering were exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder. The common stock in the Offering was sold to “accredited investors,” as defined in Regulation D, and was conducted on a “reasonable best efforts” basis.

### Departure and Appointment of Directors and Officers

On November 8, 2022, Lee McCarthy provided notice of his resignation as our Chief Operating Officer effective November 17, 2022. Mr. McCarthy’s decision to resign was not the result of any disagreements with us on any matter related to the operations, policies, or practices of us.

On December 14, 2023, Palvi Mehta’s term on the board of directors expired. Mrs. Mehta’s decision to not run for re-election was not the result of any disagreements with us on any matter related to the operations, policies, or practices of us. The Board nominated Mr. Craig Ensley to fill the vacancy on the Board; on December 14, 2023, the shareholders voted to elect Mr. Ensley to the board.

### Plan of Operations

We have been developing our materials and characterization capabilities at our headquarters in Goleta, California, in connection with the further development of our business and the implementation of our plan of operations. We have installed some key manufacturing equipment at our headquarters and will continue to develop relationships with manufacturing partners to carry out certain steps of our manufacturing processes externally. We have gained access to a rapid prototyping facility and are leveraging this access to fabricate early-stage prototypes. In the future, we intend to implement appropriate quality and manufacturing controls. Some equipment was procured previously, and other equipment is being procured through purchase orders with equipment vendors.

The primary sources of funding for equipment procurement and installation are the seed funding raised prior to becoming a public company and the funding raised from our financings. We have also leveraged funds to continue strengthening our intellectual property including patent applications, trademarks, and development of trade secrets and manufacturing process recipes. We will continue to develop our manufacturing and product development strategy by further engaging customers and strategic partners.

### 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

The 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.

#### Other Income

Other income, net of other expenses, consists primarily of income generated from subleasing a portion of our research and development facility and interest income.

#### Income Tax Expense

Income tax expense consists primarily of income taxes in certain state jurisdictions in which we conduct business.

### Results of Operations

### Six months ended December 31, 2023 compared to the six months ended December 31, 2022

Our results of operations for the six-month period ended December 31, 2023, as compared to the six-month period ended December 31, 2022, were as follows:

|  | Six Months Ended December 31, 2023 | 2022 | Change ’23 vs. ’22 |
| --- | ---: | ---: | ---: |
| Revenue | $295,392 | $- | $295,392 |
| Operating expenses | (2,906,902) | (2,721,581) | (185,321) |
| Other income | 681 | 110,991 | (110,310) |
| Loss before income tax expense | (2,610,829) | (2,610,590) | (239) |
| Income tax expense | - | - | - |
| **Net loss** | **$(2,610,829)** | **$(2,610,590)** | **$(239)** |

Revenue: Revenue increased 100% to $295,392, of which $32,400 was from product sales for sampling purchases and $262,992 was from government contracts, for the six months ended December 31, 2023. During the six months ended December 31, 2022, we were pre-revenue and, accordingly recorded no revenues.

Operating expenses: Operating expense increased $185,321 to $2,906,902 for the six months ended December 31, 2023 from $2,721,581 for the same period in 2022, due primarily to increased cost of revenue and stock-based compensation expenses, offset primarily by a reduction in consulting expenses.

Other income: Other income decreased $110,310 to $681 for the six months ended December 31, 2023 from $110,991 for the same period in 2022. The decrease was due primarily to a $105,516 decrease in sub-lease income as the sublease ended in March 2023.

Income tax expense: We did not record income tax expense for either of the six months ended December 31, 2023 and 2022.

### Impact of COVID-19

With the exception of some lingering supply chain challenges, the residual effects of the COVID-19 pandemic did not have a significant impact on the Company's results of operations or financial condition for the six months ended December 31, 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 $2,610,829 and $2,610,590 for the six months ended December 31, 2023 and 2022, respectively, and losses are expected to continue in the near term. The accumulated deficit was $11,672,895 at December 31, 2023. We have been funding our operations through private loans and the sale of 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, 2023, we had $2,423,054 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; and (c) executing material sales or research 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 $2,348,750 and $4,576,807 at December 31, 2023 and June 30, 2023, respectively. Current assets decreased $2,534,288 to $2,799.618 at December 31, 2023 from $5,333,906 at June 30, 2023, primarily due to a $2,648,636 decrease in cash. Current liabilities decreased $306,231 to $450,868 at December 31, 2023 from $757,099 at June 30, 2022, due primarily to decreases in accounts payable.

The following table shows a summary of our cash flows for the periods presented:

| Net cash (used in) provided by: | Six Months Ended December 31, 2023 | 2022 | Change ’23 vs. ’22 |
| --- | ---: | ---: | ---: |
| Operating activities | $(2,480,345) | $(2,001,195) | $(479,150) |
| Investing activities | (164,290) | (103,826) | (60,464) |
| Financing activities | (4,001) | 1,426,615 | (1,430,616) |
| **(Decrease) increase in cash** | **$(2,648,636)** | **$(678,406)** | **$1,970,230** |

Net cash used in our operating activities were $2,480,345 and $2,001,195 for the six months ended December 31, 2023 and 2022, respectively, due primarily to net losses of $2,610,829 and $2,610,590 for the six months ended December 31, 2023 and 2022, respectively.

Net cash used in our investing activities was $164,290 and $103,826 for the six months ended December 31, 2023 and 2022, respectively. Investing activities include purchase of equipment and payment for leasehold improvements.

Net cash used in our financing activities was $4,001 for the six months ended December 31, 2023 and net cash provided by our financing activities was $1,426,615 for the six months ended December 31, 2022. We paid $4,001 to purchase Lee McCarthy’s unvested restricted shares for the six months ended December 31, 2023 and received $1,426,615 from Private Placements, net of $124,385 offering cost.

### Critical Accounting Policies

A summary of our other critical accounting policies is included in our Annual Report on Form 10-K for the year ended June 30, 2023. During the six months ended December 31, 2023, there were no significant changes in our critical accounting policies.

## Controls and procedures

As filed, 2,722 characters.

#### 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, 2023, 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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 173 characters.

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.

Filed Feb 12, 2024.
Source: SEC EDGAR, the filing index for accession 0001213900-24-012610. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.