What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-02-15 compared with 2021-11-15 · 212 added, 220 removed, 64 unchanged (87% of the section changed)

42 unchanged sentences

forward-looking events and circumstances discussed in this report or incorporated by reference might not transpire.

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 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.

The Company disclaims any obligation to update

the forward-looking statements in this report.

On June 22, 2021, the

Company, Acquisition Sub and Biond Photonics entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”).

Pursuant to the terms of the Merger Agreement, on June 22, 2021 (the “Closing Date”), Biond Photonics merged with and into

Acquisition Sub, with Acquisition Sub continuing as the surviving corporation and our wholly owned subsidiary.

As a result of the Merger,

we acquired the business of Biond Photonics, a California corporation, doing business as Aeluma.

At the time the certificates of merger

reflecting the Merger were filed with the Secretaries of State of California and Delaware (the “Effective Time”), each of

Biond Photonics’ shares of capital stock issued and outstanding immediately prior to the closing of the Merger was converted into

the right to receive (a) 1.299135853 shares of our common stock (the “Common Share Conversion Ratio”) , with the maximum number

of shares of our common stock issuable to the former holders of Biond Photonics’ capital stock equal to 4,100,002 after adjustments

due to rounding for fractional shares.

Immediately prior to the Effective Time, an aggregate of 2,500,000 shares of our common stock owned

by the stockholders of PUBCO prior to the Merger were forfeited and cancelled (the “Stock Forfeiture”).

The issuance of shares

of our common stock to Biond Photonics’ former security holders are collectively referred to as the “Share Conversion.”

The Merger Agreement

contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.

As a condition to the

Merger, we entered into an indemnity agreement with our former officer and directors (the “Pre-Merger Indemnity Agreement”),

pursuant to which we agreed to indemnify such former officer and directors for actions taken by them in their official capacities relating

to the consideration, approval and consummation of the Merger and certain related transactions.

The Merger was treated

as a recapitalization and reverse acquisition for us for financial reporting purposes.

Biond Photonics is considered the acquirer for

accounting purposes, and our historical financial statements before the Merger were replaced with the historical financial statements

of Biond Photonics before the Merger in future filings with the SEC.

The Merger is intended to be treated as a tax-free reorganization

under Section 368(a) of the Internal Revenue Code of 1986, as amended.

The issuance of securities

pursuant to the Share Conversion was not registered under the Securities Act, in reliance upon the exemption from registration provided

by Section 4(a)(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Rule 506

of Regulation D promulgated by the SEC thereunder.

On June 22, 2021, the Company, Acquisition Sub

and Biond Photonics entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”).

the terms of the Merger Agreement, on June 22, 2021 (the “Closing Date”), Biond Photonics merged with and into Acquisition

Sub, with Acquisition Sub continuing as the surviving corporation and our wholly owned subsidiary.

As a result of the Merger, we acquired the business

of Biond Photonics, a California corporation, doing business as Aeluma.

At the time the certificates of merger reflecting the Merger were

filed with the Secretaries of State of California and Delaware (the “Effective Time”), each of Biond Photonics’ shares

of capital stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive (a) 1.299135853

shares of our common stock (the “Common Share Conversion Ratio”) , with the maximum number of shares of our common stock issuable

to the former holders of Biond Photonics’ capital stock equal to 4,100,002 after adjustments due to rounding for fractional shares.

Immediately prior to the Effective Time, an aggregate of 2,500,000 shares of our common stock owned by the stockholders of PUBCO prior

to the Merger were forfeited and cancelled (the “Stock Forfeiture”).

The issuance of shares of our common stock to Biond Photonics’

former security holders are collectively referred to as the “Share Conversion.”

The Merger Agreement contained customary representations

and warranties and pre- and post-closing covenants of each party and customary closing conditions.

As a condition to the Merger, we entered into

an indemnity agreement with our former officer and directors (the “Pre-Merger Indemnity Agreement”), pursuant to which we

agreed to indemnify such former officer and directors for actions taken by them in their official capacities relating to the consideration,

approval and consummation of the Merger and certain related transactions.

The Merger was treated as a recapitalization and

reverse acquisition for us for financial reporting purposes.

Biond Photonics is considered the acquirer for accounting purposes, and our

historical financial statements before the Merger were replaced with the historical financial statements of Biond Photonics before the

Merger in future filings with the SEC.

The Merger is intended to be treated as a tax-free reorganization under Section 368(a) of

the Internal Revenue Code of 1986, as amended.

The issuance of securities pursuant to the Share

Conversion was not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2)

of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Rule 506 of Regulation D

promulgated by the SEC thereunder.

These securities may not be offered or sold in the U.S.

absent registration or

an applicable exemption from the registration requirement and are subject to further contractual restrictions on transfer.

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 silicon wafers 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.

These 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, Lidar, augmented reality,

facial recognition, and other applications.

Aeluma has acquired a key piece of manufacturing equipment, an MOCVD tool, and has headquarters

in Goleta, CA with a manufacturing cleanroom to house this equipment.

Immediately following

the Merger, we sold 3,482,500 shares of our common stock pursuant to an initial closing of a private placement offering at a purchase

price of $2.00 per share (the “Offering Price”).

We held a second closing on June 28, 2021 for an additional 402,500 shares

of our common stock and a third and final close on July 1, 2021 for an additional 115,000.

Accordingly, we sold a total of 4,000,000 shares

of our common stock.

The private placement offering is referred to herein as the “Offering.”

The aggregate gross proceeds

from the three closings of the Offering were $8,000,000 (before deducting placement agent fees and expenses of the Offering of $1,027,575).

The three 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.

In connection with the

Offering and subject to the closing of the Offering, we agreed to pay the placement agent, GP Nurmenkari Inc.

(the “Placement Agent”),

registered broker-dealer, a cash placement fee of 10% of the gross proceeds raised from investors in the Offering (other than the

first $630,000 of common stock sold to pre-Merger Biond Photonics shareholders and their friends and family, for which the Placement Agent

received a 3% cash fee, and $170,000 of common stock sold to pre-Merger Biond Photonics friends and family for which the Placement Agent

received no cash fee) and to issue to it 50,000 shares of our common stock and warrants to purchase a number of shares of our common stock

equal to 10% of the number of shares of common stock sold in the Offering (other than the first $800,000 of common stock sold to pre-Merger

absent registration or an applicable exemption

from the registration requirement and are subject to further contractual restrictions on transfer.

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 silicon wafers 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.

These 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, Lidar, augmented reality, facial recognition, and other applications.

Aeluma has acquired a key piece of manufacturing equipment, an MOCVD tool, and has headquarters in Goleta, CA with a manufacturing cleanroom

to house this equipment.

Immediately following the Merger, we sold 3,482,500

shares of our common stock pursuant to an initial closing of a private placement offering at a purchase price of $2.00 per share (the

“Offering Price”).

We held a second closing on June 28, 2021 for an additional 402,500 shares of our common stock and a third

and final close on July 1, 2021 for an additional 115,000.

Accordingly, we sold a total of 4,000,000 shares of our common stock.

placement offering is referred to herein as the “Offering.”

The aggregate gross proceeds from the three closings

of the Offering were $8,000,000 (before deducting placement agent fees and expenses of the Offering of $1,082,575).

The three 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.

In connection with the Offering and subject to

the closing of the Offering, we agreed to pay the placement agent, GP Nurmenkari Inc.

(the “Placement Agent”), a U.S.

broker-dealer, a cash placement fee of 10% of the gross proceeds raised from investors in the Offering (other than the first $630,000

of common stock sold to pre-Merger Biond Photonics shareholders and their friends and family, for which the Placement Agent received a

3% cash fee, and $170,000 of common stock sold to pre-Merger Biond Photonics friends and family for which the Placement Agent received

no cash fee) and to issue to it 50,000 shares of our common stock and warrants to purchase a number of shares of our common stock equal

to 10% of the number of shares of common stock sold in the Offering (other than the first $800,000 of common stock sold to pre-Merger

Biond Photonics shareholders and their friends and family), with a term of five years and an exercise price of $2.00 per share (the “Placement

1 unchanged sentence

We also agreed to pay certain expenses of the Placement Agent in connection with the Offering.

As a result of the foregoing,

we paid the Placement Agent an aggregate commission of $748,900 and issued to it 50,000 shares of our common stock and Placement Agent

Warrants to purchase 360,000 shares of our common stock in connection with the two closings of the Offering.

We have also reimbursed the

Placement Agent for approximately $265,000 of legal and other expenses incurred in connection with the Offering.

Subject to certain customary

exceptions, we have agreed to indemnify the Placement Agent to the fullest extent permitted by law against certain liabilities that

may be incurred in connection with the Offering, including certain civil liabilities under the Securities Act, and, where such indemnification

is not available, to contribute to the payments the Placement Agent and their sub-agents may be required to make in respect of such liabilities.

As a result of the foregoing, we paid the Placement

Agent an aggregate commission of $748,900 and issued to it 50,000 shares of our common stock and Placement Agent Warrants to purchase

360,000 shares of our common stock in connection with the two closings of the Offering.

We have also reimbursed the Placement Agent for

approximately $265,000 of legal and other expenses incurred in connection with the Offering.

Subject to certain customary exceptions, we

have agreed to indemnify the Placement Agent to the fullest extent permitted by law against certain liabilities that may be incurred in

connection with the Offering, including certain civil liabilities under the Securities Act, and, where such indemnification is not available,

to contribute to the payments the Placement Agent and their sub-agents may be required to make in respect of such liabilities.

Plan of Operations

the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation

of our plan of operations.

We are currently preparing the facility for equipment installation, which includes the performance of minor

HVAC (heating, ventilating, and air conditioning) modifications in our cleanroom manufacturing area, electrical work in order to provide

proper power to equipment and the repositioning of some nonstructural walls to customize the space layout for equipment.

Soon thereafter,

equipment will be installed and then brought online, meaning power will be supplied to the equipment and various connections will be made

including gas supply lines, exhaust, and other connections.

Equipment installation will be performed by Company employees, and, in some

cases, together with field service engineers from the equipment manufacturers or consultants.

Some equipment was procured previously,

and other equipment is being procured through purchase orders with equipment manufactures.

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 alternative

public offering.

When fully installed, the equipment will be checked through various test operations to verify that the systems are performing

to requirements and we will begin to perform development runs to realize epitaxial wafers, which is the combination of the compound semiconductor

materials grown on the silicon wafer.

Thereafter, we plan to finalize the purchase agreements for epitaxial wafers with potential customers

with whom we currently have support letters, as mentioned elsewhere in this document, and then we will work to deliver on such orders.

We will also be performing internal research and development on materials and devices for our planned photodetector array products.

part of this effort, we will be engaging foundries to develop a path toward building engineering samples and future production.

we will continue to develop our manufacturing and product development strategy by further engaging customers and strategic partners.

Limited Operating

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.

During the next twelve months, we expect to take

the following steps in connection with the further development of our business and the implementation of our plan of operations.

currently preparing the facility for equipment installation, which includes the performance of minor HVAC (heating, ventilating, and air

conditioning) modifications in our cleanroom manufacturing area, electrical work in order to provide proper power to equipment and the

repositioning of some nonstructural walls to customize the space layout for equipment.

Soon thereafter, equipment will be installed and

then brought online, meaning power will be supplied to the equipment and various connections will be made including gas supply lines,

exhaust, and other connections.

Equipment installation will be performed by Company employees, and, in some cases, together with field

service engineers from the equipment manufacturers or consultants.

Some equipment was procured previously, and other equipment is being

procured through purchase orders with equipment manufactures.

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 alternative public offering.

installed, the equipment will be checked through various test operations to verify that the systems are performing to requirements and

we will begin to perform development runs to realize epitaxial wafers, which is the combination of the compound semiconductor materials

grown on the silicon wafer.

Thereafter, we plan to finalize the purchase agreements for epitaxial wafers with potential customers with

whom we currently have support letters, as mentioned elsewhere in this document, and then we will work to deliver on such orders.

also be performing internal research and development on materials and devices for our planned photodetector array products.

this effort, we will be engaging foundries to develop a path toward building engineering samples and future production.

In parallel, 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

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.

Change of Fiscal Year

On June 30, 2021, we

changed our fiscal year from the period beginning on January 1 and ending on December 31 to the period beginning on July 1 and ending

on June 30 of each year, effective immediately.

On June 30, 2021, we changed our fiscal year from

the period beginning on January 1 and ending on December 31 to the period beginning on July 1 and ending on June 30 of each year.

Results of Operations

Three months ended

September 30, 2021 compared to the three months ended September 30, 2020

Our results of operations

for the three month period ended September 30, 2021 as compared to the three month period ended September 30, 2020, were as follows –

some balances on the prior period’s combined financial statements have been reclassified to conform to the current period presentation:

Three Months Ended

September 30,

Six months ended December 31, 2021 compared

to the six months ended December 31, 2020

Our results of operations for the six-month period

ended December 31, 2021, as compared to the six-month period ended December 31, 2020, were as follows (some balances on the prior period’s

combined financial statements have been reclassified to conform to the current period presentation):

Six Months Ended

Operating Expenses:

3 unchanged sentences

Provision for income tax

We are pre-revenue and, accordingly recorded no revenues for either the three months ended September 30, 2021 or September

During the three months ended September 30, 2021 and 2020, we incurred $694,776 and $715 of operating expenses, respectively.

This increase was due to the start-up of operations and stock compensation expenses related to advisor agreements

rental income and other income:

During the three months ended September 30, 2021 and 2020, the Company recorded net rental and

other income of $91,126 and none, respectively.

The increase was due the rental of our new facility and a related sub-lease to our tenant.

for income tax :

The Company recorded no provision for income tax for either the three months ended September 30, 2021 or the three

months ended September 30, 2020.

Net loss increased to $603,650 for the three months ended September 30, 2021, as compared to $715 for the three months ended

September 30, 2020 for the reasons described above.

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 $603,650 for the three months ended

September 30, 2021 and losses are expected to continue in the near term.

$ (1,226,345 )

Net Revenues :

pre-revenue and, accordingly recorded no revenues for either the six months ended December 31, 2021 or December 31, 2020.

Operating Expenses :

During the six

months ended December 31, 2021 and 2020, we incurred $1,399,590 and $9,662 of operating expenses, respectively.

This increase was due

to the start-up of operations and stock compensation expenses related to advisor agreements

Sub-lease rental income

and other income:

During the six months ended December 31, 2021 and 2020, the Company recorded net rental and other income of

$173,245 and none, respectively.

The increase was due to the rental of our new facility and a related sub-lease to our tenant.

Provision for income tax :

The Company recorded no provision for income tax for either the six months ended December 31, 2021 or the six months ended December 31,

Net loss increased to $1,226,345 for the six months ended December

31, 2021, as compared to $9,662 for the six months ended December 31, 2020 for the reasons described above.

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.

in the financial statements, we incurred a net loss of $1,226,345 for the six months ended December 31, 2021 and losses are expected to

continue in the near term.

The accumulated deficit was $1,457,267.

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 September 30, 2021, we had $6,198,218 of cash on hand.

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.

steps include (a) raising additional capital and/or obtaining financing;

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

At December 31, 2021, we had $5,483,748 of cash on hand.

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 the Company can successfully accomplish these steps and it is uncertain that

the Company will achieve a profitable level of operations and obtain additional financing.

There can be no assurance that any additional

financing will be available to the Company 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 the Company

is 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.

Cash, total current assets,

total assets, total current liabilities and total liabilities as of September 30, 2021 as compared to June 30, 2021, were as follows:

September 30,

and (c) executing material sales or research contracts.

There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a

profitable level of operations and obtain additional financing.

There can be no assurance that any additional financing will be available

to the Company 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 the Company is 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.

Cash, total current assets, total assets, total

current liabilities and total liabilities as of December 31, 2021 as compared to June 30, 2021, were as follows:

Total current assets

1 unchanged sentence

Total liabilities

At September 30, 2021,

we had working capital of $6,735,416 compared to working capital of $7,185,135 at June 30, 2021.

Current assets decreased to $7,093,825

at September 30, 2021 from $7,472,235 at June 30, 2021, primarily as a result of the start-up of operations.

Current liabilities increased

to $358,409 at September 30, 2021 from $287,100 at June 30, 2021, primarily as a result of the timing of accounts payable.

For the three months

ended September 30, 2021, net cash used by operations was $492,052 and was the result of the net loss from operations with a change in

prepaids , offset by a change in accounts payable and accrued expenses and non-cash expenses.

For the three months ended September 30,

2020, net cash used in operations was $715.

Net cash used in our

investing activities were $258,910 and none for the three months ended September 30, 2021 and September 30, 2020, respectively.

activity for the 2021 period related to the setup of our new facility.

Our financing activities

generated a cash inflow of $161,930 for the three months ended September 30, 2021, due to the offering described above.

There were no

financing activities for the three months ended September 30, 2020.

Critical Accounting

The preparation of financial statements in

accordance with U.S.

GAAP requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the

date of the financial statements and the reported amounts of net revenues and expenses in the reporting period.

We base our estimates

and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs

and expenses that are not readily apparent from other sources.

We continually review the estimates and underlying assumptions to ensure

they are appropriate for the circumstances.

Accounting assumptions and estimates are inherently uncertain and actual results may differ

materially from our estimates.

A summary of our other

critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations

contained in our Transition Report on Form 10-KT for the period ended June 30, 2021.

During the three months ended September 30, 2021,

there were no significant changes in our critical accounting policies.

Off-Balance Sheet

We do not have any off-balance

sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose

entities” (SPEs).

Quantitative and Qualitative Disclosures

about Market Risk

At December 31, 2021, we had working capital of $5,987,614

compared to working capital of $7,185,135 at June 30, 2021.

Current assets decreased to $6,387,000 at December 31, 2021 from $7,472,235

at June 30, 2021, primarily as a result of the start-up of operations.

Current liabilities increased to $399,386 at December 31, 2021

from $287,100 at June 30, 2021, primarily as a result of the timing of accounts payable.

For the six months ended December 31, 2021, net cash used by operations

was $895,185 and was the result of the net loss from operations with a change in prepaids, offset by a change in accounts payable and

accrued expenses and non-cash expenses.

For the six months ended December 31, 2020, net cash provided by operations was $2,431.

Net cash used in our investing activities were $570,248 and none for

the six months ended December 31, 2021 and 2020, respectively.

Investing activity for the 2021 period related to the setup of our new

Our financing activities generated a cash inflow of $161,930 for the

six months ended December 31, 2021, due to the offering described above.

In the six months ended December 31, 2020, financing activities

netted $139,200 from Founder loans and a small private placement.

Critical Accounting Policies

The preparation of financial statements in accordance

GAAP requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the

financial statements and the reported amounts of net revenues and expenses in the reporting period.

We base our estimates and assumptions

on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results

of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses

that are not readily apparent from other sources.

We continually review the estimates and underlying assumptions to ensure they are appropriate

for the circumstances.

Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our

A summary of our other critical accounting policies

is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Transition

Report on Form 10-KT for the period ended June 30, 2021.

During the six months ended December 31, 2021, there were no significant changes

in our critical accounting policies.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements,

financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities”

Quantitative and

Qualitative Disclosures about Market Risk

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis