Aeluma Inc
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
ALMU$6.99+16.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001213900-24-041529
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001213900-24-095832
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 50 previous paragraphs and 54 current paragraphs.
22 unchanged; 17 reworded; 13 added; 11 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Additionally, Aeluma’s technology may be used to manufacture other electronic and optoelectronic devices in the future including lasers, transistors, and solar cells.
Current report
Recent Government Contract
Current report
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.
Current report
Private Placements
Current report
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.
Current report
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.
Current report
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.** **
Current report
Other Income (Expense)
Current report
Interest income consists primarily of interest earned in interest-bearing savings account in bank.
Current report
Amortization of discount on convertible notes represents the non-cash interest expense associated with the amortization of convertible notes issued to our debtholders.
Current report
Changes in the fair value of derivative liabilities reflect valuation changes in the derivatives held by the Company.
Current report
Revenue: Revenue increased $448,335 to $480,735, of which $430,735 was from government contracts and $50,000 was from commercial product and service contract, for the three months ended September 30, 2024 from $32,400, all of which was from commercial product and service contracts for the same period in 2023.
Current report
Other income (expense): Other income (expense) consists of amortization of discount on convertible notes of ($144,776), changes in fair value of derivative liabilities of $146,435 and interest income of $102 for the three months ended September 30, 2024.
Removed paragraphs (11)
Previous report
Private Placement
Previous report
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”).
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
Departure and Appointment of Directors and Officers
Previous report
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.
Previous report
Other Income
Previous report
Other income, net of other expenses, consists primarily of interest income and income generated from subleasing a portion of our research and development facility. The sub-lease ended in March 2023
Previous report
Revenue: Revenue increased 100% to $639,286, of which $32,400 was from product sales for sampling purchases and $606,886 was from government contracts, for the nine months ended March 31, 2024. During the nine months ended March 31, 2023, we were pre-revenue and, accordingly recorded no revenues.
Previous report
Other income: Other income decreased $217,888 to $798 for the nine months ended March 31, 2024 from $218,686 for the same period in 2023. The decrease was due primarily to a $128,921 decrease in sub-lease income as the sublease ended in March 2023.
Reworded paragraphs (17)
Previous wording
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.
Current wording
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 photodetectors and photodetector array circuits for imaging applications in mobile devices, as well as other technologies. 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.
Previous wording
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.
Current wording
Because we will leverage compound semiconductor materials, our devices may operate at longer wavelengths than traditional silicon-based image sensors, 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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
Nine months ended March 31, 2024 compared to the nine months ended March 31, 2023
Current wording
Three months ended September 30, 2024 compared to the three months ended September 31, 2023
Previous wording
Our results of operations for the nine-month period ended March 31, 2024, as compared to the nine-month period ended March 31, 2023, were as follows:
Current wording
Our results of operations for the three ended September 30, 2024, as compared to the same period of 2023, were as follows:
Previous wording
Operating expenses: Operating expense decreased $76,513 to $4,213,564 for the nine months ended March 31, 2024 from $4,290,077 for the same period in 2023, due primarily to a reduction in consulting expenses, offset partially by increased salaries and stock-based compensation expenses.
Current wording
Operating expenses: Operating expense decreased $302,996, or 20.0%, to $1,212,115 for the three months ended September 30, 2024 from $1,515,111 for the same period in 2023, due primarily to decreases in consulting and professional expenses, offset partially by increases in cost of revenue associated with increased revenue and higher seasonal utility charges.
Previous wording
Income tax expense: We did not record income tax expense for either of the nine months ended March 31, 2024 and 2023.
Current wording
Income tax expense: We did not record income tax expense for either of the three months ended September 30, 2024 and 2023.
Previous wording
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 nine months ended March 31, 2024.
Current wording
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 three months ended September 30, 2024.
Previous wording
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 $3,573,480 and $4,071,391 for the nine months ended March 31, 2024 and 2023, respectively, and losses are expected to continue in the near term. The accumulated deficit was $12,635,546 at March 31, 2024. We have been funding our operations through the sale of common stock in private placement transactions.
Current wording
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 $729,619 and $1,482,309 for the three months ended September 30, 2024 and 2023, respectively, and losses are expected to continue in the near term. The accumulated deficit was $14,353,980 at September 30, 2024. We have been funding our operations through the sale of common stock in private placement transactions.
Previous wording
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 March 31, 2024, we had $1,874,565 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.
Current wording
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 September 30, 2024, we had $3,502,520 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.
Previous wording
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.
Current wording
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.
Previous wording
We had working capital of $1,495,903 and $4,576,807 at March 31, 2024 and June 30, 2023, respectively. Current assets decreased $3,191,699 to $2,142,207 at March 31, 2024 from $5,333,906 at June 30, 2023, primarily due to a $3,197,125 decrease in cash. Current liabilities decreased $110,794 to $646,304 at March 31, 2024 from $757,099 at June 30, 2023, due primarily to decreases in accounts payable.
Current wording
We had working capital of $1,395,817 and $766,160 at September 30, 2024 and June 30, 2024, respectively. Current assets increased $2,634,144 to $4,026,990 at September 30, 2024 from $1,392,846 at September 30, 2024, primarily due to a $2,211,448 increase in cash. Current liabilities increased $2,004,487 to $2,631,173 at September 30, 2024 from $626,686 at June 30, 2024, due primarily to increases in derivative liabilities.
Previous wording
Net cash used in our operating activities were $2,876,190 and $2,699,033 for the nine months ended March 31, 2024 and 2023, respectively, due primarily to net losses of $3,573,480 and $4,071,391 for the nine months ended March 31, 2024 and 2023, respectively.
Current wording
Net cash used in our operating activities were $931,915 and $1,303,362 for the three months ended September 30, 2024 and 2023, respectively, due primarily to net losses of $729,619 and $1,482,309 for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Net cash used in our investing activities was $316,934 and $255,579 for the nine months ended March 31, 2024 and 2023, respectively. Investing activities include purchase of equipment and payment for leasehold improvements.
Current wording
Net cash used in our investing activities was $1,637 and $7,100 for the three months ended September 30, 2024 and 2023, respectively. Investing activities include purchase of equipment.
Previous wording
Net cash used in our financing activities was $4,001 for the nine months ended March 31, 2024 and net cash provided by our financing activities was $4,071,145 for the nine months ended March 31, 2023. We paid $4,001 to purchase Lee McCarthy’s unvested restricted shares for the nine months ended March 31, 2024 and received $4,071,145 from Private Placements, net of $270,855 offering cost.
Current wording
Net cash provided by our financing activities was $3,145,000 for the three months ended September 30, 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 three months ended September 30, 20214 and paid $4,001 to purchase Lee McCarthy’s unvested restricted shares for the same period of 2023.
Previous wording
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 nine months ended March 31, 2024, there were no significant changes in our critical accounting policies.
Current wording
During the three months ended September 30, 2024, there were no significant changes in our critical accounting policies. (not needed)
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Aeluma has acquired key manufacturing equipment, and has headquarters in Goleta, California with a manufacturing cleanroom to house this equipment.
Current report — wording carried from elsewhere
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.