What changed in this filing

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Item 9A. Controls and Procedures

2023-09-25 compared with 2022-09-28 · 385 added, 347 removed, 382 unchanged (66% of the section changed)

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Disclosure Controls and Procedures

Disclosure controls and procedures

(as defined in Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our

reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified

in the SEC’s rules and forms.

Disclosure controls and procedures (as defined

in Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed

under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the

SEC’s rules and forms.

Disclosure controls and procedures are also designed with the objective of ensuring that such information

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to allow timely decisions regarding required disclosure.

Our Chief Executive Officer

(principal executive officer) and Principal Financial Officer (principal financial officer), based on their evaluation of our disclosure

controls and procedures as of June 30, 2022, concluded that our disclosure controls and procedures were ineffective as of that date.

Our Chief Executive Officer (principal executive

officer) and Principal Financial Officer (principal financial officer), based on their evaluation of our disclosure controls and procedures

as of June 30, 2023, concluded that our disclosure controls and procedures were ineffective as of that date.

Internal Control Over Financial Reporting

Management’s annual

report on internal control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal

control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.

Internal control over financial reporting is

a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial

statements for external purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting

may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk

that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures

may deteriorate.

Our management, with the participation

of our Chief Executive Officer (principal executive officer) and Principal Financial Officer (principal financial officer), has assessed

the effectiveness of our internal control over financial reporting as of June 30, 2022.

In making this assessment, management used the

criteria set forth in the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework

Based on the assessment using

those criteria, management concluded that, as of June 30, 2022, our internal control over financial reporting was ineffective due to an

insufficient number of personnel with appropriate technical accounting and SEC reporting expertise to adhere to certain control disciplines

and to evaluate and properly record certain non-routine and complex transactions.

A material weakness in internal

control over financial reporting is a deficiency, or combination of deficiencies, in internal control over financial reporting such that

there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or

detected on a timely basis.

Attestation report of the

registered public accounting firm.

This report does not include an attestation report of our independent registered public accounting

firm regarding internal control over financial reporting.

Our management’s report was not subject to attestation by our independent

registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this report.

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 year ended June 30, 2022 that have materially affected, or are reasonably likely

to materially affect, our internal control over financial reporting.

Management’s annual report on internal

control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal control over our

financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.

Internal control over financial reporting is a process designed

to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external

purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our

Chief Executive Officer (principal executive officer) and Principal Financial Officer (principal financial officer), has assessed the

effectiveness of our internal control over financial reporting as of June 30, 2023.

In making this assessment, management used the criteria

set forth in the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013) .

Based on the assessment using those criteria,

management concluded that, as of June 30, 2023, our internal control over financial reporting was ineffective due to an insufficient number

of personnel with appropriate technical accounting and SEC reporting expertise to adhere to certain control disciplines and to evaluate

and properly record certain non-routine and complex transactions.

A material weakness in internal control over financial

reporting is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable

possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely

Attestation report of the registered public

accounting firm.

This report does not include an attestation report of our independent registered public accounting firm regarding

internal control over financial reporting.

Our management’s report was not subject to attestation by our independent registered

public accounting firm pursuant to the rules of the SEC that permit us to provide only the management’s report in this report.

Changes in internal control over financial

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 year ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

Other Information.

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As per our amended and restated bylaws, our board

of directors are divided into three classes of directors.

of directors is divided into three classes of directors.

At each annual meeting of stockholders, a class of directors will be elected

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third annual meeting following their election or until their earlier death, resignation or removal.

The Class I directors consist of Mr.

Paglia, whose term expired at our first annual meeting of stockholders following the Merger and both of whom were re-appointed

at such meeting.

The Class II director is Ms.

Mehta and her term

will expire at our second annual meeting of stockholders following the Merger.

The Class III director is Mr.

Klamkin and his

term will expire at our third annual meeting of stockholders following the Merger.

The division of our board of directors into three

classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

See the section of this

Report captioned “Description of Securities-Anti-Takeover Provisions” for a discussion of these and other anti-takeover provisions

found in our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately

the closing of the Merger.

A majority of the authorized number of directors

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policies or practices.

On November 15, 2021,

the Board also approved the appointment of Ms.

On November 15, 2021, the Board also approved

the appointment of Ms.

Palvi Mehta to fill the vacancy created by Mr.

McCarthy’s resignation for the remainder

of his term, and her independent director agreement, which sets her compensation and establishes other terms and conditions governing

her service on the Board.

McCarthy’s resignation for the remainder of his term, and

her independent director agreement, which sets her compensation and establishes other terms and conditions governing her service on the

Mehta served as an independent director as of December 1, 2021.

On December 1, 2021,

we appointed Mr.

John Paglia to the board of directors.

On December 1, 2021, we appointed Mr.

to the board of directors.

On November 8, 2022, Lee McCarthy provided notice

of his resignation as our Chief Operating Officer effective November 17, 2022.

McCarthy’s decision to resign was not the

result of any disagreements with the Company on any matter related to the operations, policies, or practices of the Company.

The following table provides information regarding

our executive officers and directors as of the date hereof:

Directors Class, if applicable

Expiration of Director Term

Directors Class,

if applicable

Expiration of

Director Term

Executive Officers

Jonathan Klamkin

Chief Executive Officer & Chief Financial Officer & President &

Chief Operating Officer

Chief Executive Officer & Chief Financial Officer & President & Chairman

Non-Employee Directors

* Was re-elected at the 2022 annual shareholder meeting.

Re-elected at the 2022 annual shareholder meeting.

Background of Officers and Directors

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in Materials from the University of California, Santa Barbara.

Lee McCarthy serves as our

Chief Operating Officer.

Lee also served as a director from October 27, 2020 until December 1, 2021.

He is a semiconductor industry executive

with 14 years of relevant experience.

His prior experience includes being the first employee (2007-2021) and becoming Senior Director

(2016-2021) of MOCVD Global Operations at Transphorm, Inc.

McCarthy led a 24/7 production operation of GaN-on-Si materials

and managed MOCVD operations in the US and Japan for Transphorm, Inc.

He was responsible for global strategy for MOCVD

production, epi customer agreements, cost models, ERP and MES for rapid scale of manufacturing.

McCarthy was also Principal

Investigator for an $18M US DoD program to establish millimeter wave MOCVD materials supply chain (2019-2021).

He holds a Bachelor of

Science and Masters of Science and a Ph.D.

in Electrical Engineering from the University of California, Santa Barbara.

DenBaars serves as

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In 2014, he assisted Dr.

Jeffry Shealy in the founding

of Akoustis Technologies Inc.

Jeffry Shealy in the founding of

Akoustis Technologies Inc.

(AKTS) for commercialization of RF Filters, and he is currently on the Board of Directors.

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technical publications, 360 conference presentations, and over 185 patents.

DenBaars has a Bachelor of Science in Metallurgical

Engineering from the University of Arizona and a Master of Science and a Ph.D.

in Material Science and Electrical Engineering, respectively

from the University of Southern California.

Palvi Mehta serves

as one of our directors.

Mehta is an operating partner and CFO for Pioneer Square Labs (PSL), a start-up studio and venture

fund with $200M in assets under management.

She provides financial and operational oversight, supports the investment process, and assists

portfolio companies with financial, operating and scaling strategies.

Palvi joined PSL after two decades in senior financial roles in

the wireless, manufacturing, networking, and security industry.

DenBaars has a Bachelor of Science in Metallurgical Engineering

from the University of Arizona and a Master of Science and a Ph.D.

in Material Science and Electrical Engineering, respectively from the

University of Southern California.

We believe Mr.

DenBaars qualifies as our director because of his entrepreneurial and start-up experience,

as well as his engineering knowledge.

Palvi Mehta serves as one of our

Mehta is an operating partner and CFO for Pioneer Square Labs (PSL), a start-up studio and venture fund with $200M in assets

under management.

She provides financial and operational oversight, supports the investment process, and assists portfolio companies with

financial, operating and scaling strategies.

Palvi joined PSL after two decades in senior financial roles in the wireless, manufacturing,

networking, and security industry.

Prior to PSL, she was the CFO of three venture-backed startups.

most recently the CFO at ExtraHop Networks.

She was most recently the CFO at ExtraHop

A veteran of the tech startup community, Ms.

Mehta has also been the CFO of NewPath Networks,

and RadioFrame Networks.

During her career, she has raised hundreds of millions of dollars across both the equity and debt markets

and has successfully completed multiple exits.

Mehta has also been the CFO of NewPath Networks, and RadioFrame Networks.

her career, she has raised hundreds of millions of dollars across both the equity and debt markets and has successfully completed multiple

She began her career as a CPA and an auditor at Ernst & Young.

Palvi received the 2018

Executive Excellence Award from Seattle Business Magazine.

In addition, she was selected by the Puget Sound Business Journal as the 2016

CFO of the Year for mid-size companies.

Palvi received the 2018 Executive Excellence Award from Seattle

Business Magazine.

In addition, she was selected by the Puget Sound Business Journal as the 2016 CFO of the Year for mid-size companies.

Mehta graduated Summa Cum Laude from the University of California, Berkeley with a B.S.

business, with an emphasis in finance and accounting.

Palvi is a strong supporter of women in tech and is passionate about providing the

opportunity for CS education to women and underrepresented minorities.

She is a board member and treasurer of Code.org.

joined the Board of Directors of 5E Advanced Materials, Inc.

in business, with an emphasis in finance and

Palvi is a strong supporter of women in tech and is passionate about providing the opportunity for CS education to women and

underrepresented minorities.

She is a board member of Code.org.

We believe she qualifies as one of our directors because of her leadership

and entrepreneurial experience and knowledge.

John Paglia serves as one of

our directors and chairs our audit committee.

Paglia is also an independent board director and audit committee chair for Simulations

and an advisor to a number of private equity and venture capital funds,

and startup companies;

and sits on Pepperdine’s Most Fundable Companies Council.

At Pepperdine University’s Graziadio

Business School, he is a tenured Professor of Finance where his specialty areas are venture capital, private equity, corporate finance,

business valuations, and mergers and acquisitions.

In addition, he held a number of leadership positions at Pepperdine University since

joining the faculty in 2000, most recently as Senior Associate Dean where he had oversight for all of the business school faculty, faculty

affairs support staff, and key strategic projects;

and, prior to that, as executive director of Graziadio Business School’s entrepreneurship

John Paglia serves as one of our

directors and chairs our audit committee.

Paglia is also an independent board director and audit committee chair for Simulations Plus,

SLP), an advisor to a number of venture capital funds and startup companies;

and sits on Pepperdine’s Most Fundable

Companies Council.

At Pepperdine University’s Graziadio Business School, he is a tenured Professor of Finance where his specialty

areas are venture capital, private equity, corporate finance, business valuations, and mergers and acquisitions.

In addition, he held

a number of leadership positions at Pepperdine University since joining the faculty in 2000, most recently as Senior Associate Dean where

he had oversight for all of the business school faculty and key strategic projects, and, prior to that, as executive director of Graziadio

Business School’s entrepreneurship institute.

Paglia holds a Ph.D.

in Finance, an MBA, a B.S.

in Finance, and is a Certified Public Accountant, Chartered Financial Analyst,

and is NACD Directorship Certified™.

Paglia is a recipient of several prestigious honors for his work on the financing and capital

We believe his knowledge of technical accounting issues and business experience qualify him as an expert in financial matters

and as a qualified candidate for the Board.

in Finance, and is a Certified

Public Accountant, Chartered Financial Analyst, and is NACD Directorship Certified™.

Paglia is a recipient of several prestigious

honors for his work on the financing and capital markets.

We believe his knowledge of technical accounting issues and business experience

qualify him as an expert in financial matters and as a qualified candidate for the Board.

Corporate Social Responsibility

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judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise

limiting for more than 60 days the right of such person to engage in any activity described y such activity;

limiting for more than 60 days the right of such person to engage in any activity described by such activity;

(5) Found by a court of competent

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relating to an alleged violation of:

(i) Any Federal or State securities

or commodities law or regulation;

(i) Any Federal or State

securities or commodities law or regulation;

(ii) Any law or regulation

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a majority of “independent directors” or have any committees.

However, we do currently have two independent directors on our

board and we have formed committees.

However, as of the date hereof, we currently have two independent

directors on our board and are operating with three board committees.

Our board of directors shall determine which directors

qualify as “independent” directors in accordance with listing requirements of The NASDAQ Stock Market, or NASDAQ.

independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years,

one of our employees and that neither the director nor any of his family members has engaged in various types of business dealings with

Our Board of Directors has determined that Ms.

Mehta and Mr.

Paglia shall be considered independent directors in accordance with the definition of independence applied by the NASDAQ

Stock Market.

Although it is not required, we established three

standing committees:

an audit committee in compliance with Section 3(a)(58)(A) of the Exchange Act, a compensation

committee and a nominating and governance committee.

We will add independent directors, as needed, to each committee at the necessary

time as per the applicable exchange’s rules.

Audit committee.

Under the national exchange

listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must

be independent, subject to certain phase-in provisions.

At this time, Ms.

Mehta and Mr.

Paglia are the only directors who meet

the independent director standard under national exchange listing standards and under Rule 10-A-3(b)(1) of the Exchange Act;

DenBaars also serves on the Audit committee, although he is not considered “independent”.

selected to serve as chairman of our audit committee.

Each member of the audit committee is financially literate and our Board

has determined that Ms.

Mehta qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

We adopted an audit committee charter, which

will detail the purpose and principal functions of the audit committee, including:

compensate, and oversee the work of any registered public accounting firm employed by us;

any disagreements between management and the auditor regarding financial reporting;

● pre-approve all

auditing and non-audit services;

independent counsel, accountants, or others to advise the audit committee or assist in the conduct of an investigation;

any information it requires from employees-all of whom are directed to cooperate with the audit committee’s requests-or external

with our officers, external auditors, or outside counsel, as necessary;

that management has established and maintained processes to assure our compliance with all applicable laws, regulations and corporate

Compensation Committee.

The compensation

committee consists of Ms.

Mehta (Chair), Mr.

Paglia and Mr.

Under the national exchange listing standards and applicable

SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent, subject to certain

phase-in provisions.

Mehta and Mr.

Paglia meet the independent director standard under national exchange listing standards

applicable to members of the compensation committee.

We adopted a compensation committee charter, which

details the purpose and responsibility of the compensation committee, including:

the responsibilities of the Board relating to compensation of our directors, executive officers and key employees;

the Board in establishing appropriate incentive compensation and equity-based plans and to administer such plans;

the annual process of evaluation of the performance of our management;

such other duties and responsibilities as enumerated in and consistent with compensation committee’s charter.

The charter will permit the committee to retain

or receive advice from a compensation consultant and will outline certain requirements to ensure the consultants, independence or certain

circumstances under which the consultant need not be independent.

However, as of the date hereof, the Company has not retained such a

Nominating and Governance Committee.

nominating and governance committee consists of Mr.

DenBaars (Chair), Ms.

Mehta and Mr.

We adopted a nominating and

governance committee charter, which details the purpose and responsibilities of the nominating and governance committee, including:

the Board by identifying qualified candidates for director nominees, and to recommend to the board of directors the director nominees

for the next annual meeting of stockholders;

the Board in its annual review of its performance;

to the board director nominees for each committee of the Board;

and recommend to the Board corporate governance guidelines applicable to us.

Meetings of the Board of Directors

During the year ended

June 30, 2022, Board meetings were held on August 18, 2021, February 10, 2022, and May 12, 2022.

The Board also transacted business by

unanimous written consent.

During the year ended June 30, 2023, Board meetings

were held on September 22, 2022, December 1.

2022, February 9, 2023 and May 11, 2023.The Board also transacted business by unanimous written

consent throughout the year.

Family Relationships

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in the Securities Act and is therefore unenforceable.

Board Leadership Structure and Role in

Risk Oversight

Klamkin serves as

our Chief Executive Officer and our Chairman.

Although the roles of our Chief Executive Officer and Chairman of our board of directors

are currently performed by the same person, we do not have a policy regarding the separation of these roles, as our board of directors

believes that it is in the best interests of the Company and our shareholders to make that determination from time to time based upon

the position and direction of the Company and the membership of our board of directors.

Our board of directors

has determined that our leadership structure is appropriate for the Company and our shareholders as it helps to ensure that the board

of directors and management act with a common purpose and provides a single, clear chain of command to execute our strategic initiatives

and business plans.

In addition, our board of directors believes that a combined role of Chief Executive Officer and Chairman is better

positioned to act as a bridge between management and our board of directors, facilitating the regular flow of information.

directors also believes that it is advantageous to have a Chairman with an extensive knowledge of our industry.

Board Leadership Structure and Role in Risk Oversight

Klamkin serves as our Chief Executive Officer

and our Chairman.

Although the roles of our Chief Executive Officer and Chairman of our board of directors are currently performed by

the same person, we do not have a policy regarding the separation of these roles, as our board of directors believes that it is in

the best interests of the Company and our shareholders to make that determination from time to time based upon the position and direction

of the Company and the membership of our board of directors.

Our board of directors has determined that our

leadership structure is appropriate for the Company and our shareholders as it helps to ensure that the board of directors and management

act with a common purpose and provides a single, clear chain of command to execute our strategic initiatives and business plans.

our board of directors believes that a combined role of Chief Executive Officer and Chairman is better positioned to act as a bridge between

management and our board of directors, facilitating the regular flow of information.

Our board of directors also believes that it is advantageous

to have a Chairman with an extensive knowledge of our industry.

Delinquent Section 16(a) Reports

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filing requirements were satisfied on a timely basis.

Code of Ethics

The Company adopted a Code of Ethics pursuant

to rules described in Regulation S-K.

The Company has four persons serving as directors, two persons serving as executive officers,

and nine total employees.

The Company does not receive any revenues or investment capital.

Code of Business Conduct and Ethics

Our Board of Directors adopted a Code of Ethics,

a copay of which is attached herein as Exhibit 14.1, that applies to all of directors and employees, pursuant to rules described in Regulation

The code provides fundamental ethical principles to which these individuals are expected to

adhere to and will operate as a tool to help our directors, officers and employees understand the high ethical standards required for

employment by, or association with, our Company.

This Code constitutes a “code of ethics” as defined by the rules of

You can review the Code of Ethics by accessing our public filings at the SEC’s web site at www.sec.gov .

the code can be also obtained from our website, www.aeluma.com.

Any amendments to, or waivers from, a provision of our code of ethics

that applies to any of our executive officers will be posted on our website in accordance with the rules of the SEC.

Shareholder Board Nominations

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proxy statement, the requirements of Rule 14a-8 (or any successor provision) under the Exchange Act.

Nothing in the bylaws hall be deemed

Nothing in the bylaws shall be deemed

to affect any right of the Company to omit a proposal from the Company’s proxy statement pursuant to Rule 14a-8 (or any successor

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Executive Compensation

As an “emerging growth

company” as defined in the JOBS Act and a smaller reporting company we are not required to include a Compensation Discussion and

Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies and smaller

reporting companies.

None of the Company’s

directors or officers prior to the merger received any compensation from the Company or Biond Photonics.

The Board of Directors approved

an annual base compensation of $230,000 and $200,000 for Mr.

Klamkin and Mr.

McCarthy, respectively, effective July 1, 2021.

As an “emerging growth company” as

defined in the JOBS Act and a smaller reporting company we are not required to include a Compensation Discussion and Analysis section

and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies and smaller reporting companies.

Summary Compensation Table

The following summary compensation table sets

forth all compensation awarded to, earned by, or paid to the named executive officer during the years ended June 30, 2023 and 2022 in

all capacities for the accounts of our executive, including the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief

Operations Officer (COO):

and principal position

$ 259,660 (2)

CFO and Director

CFO, COO, Director(3)

The Board of Directors approved an annual base compensation of $230,000 for Mr.

Klamkin effective July 1, 2021.

On October 14, 2022, the Board of Directors approved the adjustment of Mr.

Klamkin’s compensation to $10,000.00 per month for the period from October 1, 2022 to December 31, 2022, and then back to $19,166.67 per month ($230,000 per year) as of January 1, 2023.

On November 30, 2022, the Board of Directors approved an increase in Mr.

Klamkin’s annual salary to $255,000 and also approved issuing him 100,000 options with a 4-year vesting schedule, with an exercise price of $2.10 per share, subject to continued service as of each such vesting date

The dollar amounts in this column reflect the grant date fair value of stock option awards granted during the year ended June 30, 2023.

These amounts have been calculated in accordance with FASB Accounting Standards Codification Topic 718.

McCarthy served as interim Chief Financial Officer and Chief Operating Officer from the Merger until November 2022;

he also served as a director from the Merger until November 2021.

McCarthy received five (5) months of his annual salary in the fiscal year ending June 30, 2023.

Employment and Change in Control Agreements

We do not have an employment

agreement with any of our officers.

We do not have an employment agreement with any

of our officers.

However, pursuant to our advisor agreement with Mr.

Denbaars, if there is a change of control, other

than the Merger, while he is still retained by the Company as an advisor, all of his unvested shares, per his amended advisor agreement,

will vest at the closing of such change in control transaction.

Additionally, as per the restricted stock purchase agreements we maintain

Klamkin and Mr.

McCarthy, if either of their respective employment with the Company is terminated by the Company, other than

for cause, or is terminated by the individual for Good Reason (as defined in the related agreement), within a year after the Merger, then,

effective as of such termination, 100% of such terminated person’s unvested shares will vest.

Compensation Paid to Directors

At present we do not pay our

Directors any cash compensation or cost reimbursement for their service as Directors.

We have no standard arrangement pursuant to which

our Directors are compensated for any services provided as a director or for committee participation or special assignments.

The Company’s

Directors were not paid any cash compensation during fiscal years 2020, 2021, or 2022.

Pursuant to Ms.

Paglia’s appointment as a director, we entered into an independent director agreement with each of them, pursuant to which we

shall issue each of them 125,000 stock options at a price of $2.00 per share and provide each with standard indemnification.

of the option grants are the same for Ms.

Mehta and Mr.

50,000 shares of the stock options shall vest in equal quarterly increments

during the first year of directorship;

37,500 shares of the stock options shall vest in equal quarterly increments over the second;

the remaining 37,500 shares of the stock options shall vest in equal quarterly increments over the third year of the directorship;

the director resigns or is removed from the board of directors, any unvested options are cancelled.

For each year of committee service,

Mehta will receive an additional 15,500 options with vesting in equal quarterly increments, and Mr.

Paglia will receive an additional

16,750 options with vesting in equal quarterly increments.

Both agreements became effective as of December 1, 2021, and committee service

commenced on February 10, 2022.

As of June 30, 2022, 28,875 options have vested for Ms.

Mehta, and 29,188 options have vested for Mr.

Paglia, pursuant to their independent director agreements.

Pension, Retirement or Similar Benefit Plans

With the exception of the

executive officers that are eligible for participation in the company 401(k) plan, there are currently no arrangements or plans in which

we provide pension, retirement or similar benefits for directors or executive officers.

Cash or non-cash compensation may be paid to our

executive officers, including stock options, at the discretion of the board of directors or a committee thereof.

Denbaars, if there is a change of control, other than the Merger,

while he is still retained by the Company as an advisor, all of his unvested shares, per his amended advisor agreement, will vest at the

closing of such change in control transaction.

Additionally, as per the restricted stock purchase agreements we maintain with Mr.

McCarthy, if either of their respective employment with the Company is terminated by the Company, other than for cause, or is

terminated by the individual for Good Reason (as defined in the related agreement), within a year after the Merger, then, effective as

of such termination, 100% of such terminated person’s unvested shares will vest.

Outstanding Equity Awards at Fiscal Year End

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certain outstanding shares held by each of our named executive officers as of June 30, 2023.

These shares were converted into shares

of our common stock in connection with the Merger, and the table below reflects all outstanding shares as of June 30, 2022 as if they

had been granted by us.

None of our named executive officers held any outstanding options, restricted stock unit or other equity

awards as of that date.

These shares were converted into shares of

our common stock in connection with the Merger, and the table below reflects all outstanding shares as of June 30, 2023 as if they had

been granted by us.

None of our named executive officers held any outstanding options, restricted stock unit or other equity awards

as of that date.

Outstanding Equity Awards at June 30, 2023

Stock Options

of Securities Underlying Unexercised Options (#) Exercisable

of Securities Underlying Unexercised Options (#) Unexcersisable

Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options

Exercise Prices

Expiration Date

of Shares or Units of Stock That Have Not Vested

Value of Share or Units of Stock That Have Not Vested

Equity Incentive Plan Awards:

Number of Usernamed Shares, Units or Other Rights That Have Not Been Issued

Incentive Plan Awards:

Markey or Payout Value of Unearned Shares, Units or Other Rights That

Have Not Been Issued

Unexcersisable

Jonathan Klamkin

$ 1,255,831 (2)

On November 30, 2022, we granted to Mr.

Klamkin a stock option to purchase 100,000 shares of our common stock.

The shares will vest in equal quarterly installments over the following four years, subject to continued service as of each such vesting date

These shares were purchased pursuant to Founder’s Restricted Stock Purchase Agreement between Mr.

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Accordingly, as of June 30, 2023, 1,190,875 shares have vested.

The market value of the unvested shares was based on $0.008 per share, which was purchase price of the shares before the merger.

These shares were purchased pursuant to Founder’s Restricted Stock Purchase Agreement between Mr.

McCarthy and the Company on October 27, 2020.

McCarthy purchased a total of 1,623,920 shares (represented 1,250,000 shares of Biond prior to the Merger) pursuant to the agreement.

Pursuant to the agreement, 20% of the shares vested on the date the agreement was signed and starting on November 30, 2020 and for every month thereafter until employment termination, 1/48 th of the remaining shares shall vest on the last day of each succeeding calendar month.

The agreement also provides that if there is a change of control, like the Merger, and if Mr.

McCarthy is terminated, other than for cause, during the period starting 90 days before the Merger and for a year thereafter, all unvested shares shall vest at the date of termination.

Accordingly, as of June 30, 2022, 866,090 shares have vested.

The market value of the unvested shares was based on $0.008, which was the purchase price of the shares before the merger.

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters.

The following table sets forth certain information

with respect to the beneficial ownership of our common stock as of September 27, 2022, by:

each of our named executive officers;

each of our directors;

all of our current directors and executive officers as a group;

each person, or group of affiliated persons, who beneficially owned more than 5% of our common stock.

The market value of the unvested shares was based on $2.90 per share, which was the closing price of our common stock on June 30, 2023.

Compensation Paid to Directors

The following table provides a summary of compensation

paid to directors, who are not also executive officers, during the fiscal year ended June 30, 2023.

The only director who is also an executive

director is Mr.

Klamkin, whose compensation is included in the Summary Compensation table above.

Fees Earned or

Option Awards

The dollar amounts in this column reflect the grant date fair value of stock option awards granted during the year ended June 30, 2023.

These amounts have been calculated in accordance with FASB Accounting Standards Codification Topic 718.

On February 10, 2023, we granted Ms.

Mehta and Mr.

Paglia stock options to purchase 15,500 and 16,750 shares, respectively, of our common stock at a price of $3.00.

The shares will vest in equal quarterly installments over one year, subject to continued service as of each such vesting date.

Pursuant to Ms.

Mehta and Mr.

Paglia’s appointment as directors, we entered into an independent director agreement with each of them, pursuant to which we issued each of them 125,000 stock options at a price of $2.00 per share and provided each with standard indemnification.

The terms of the option grants are the same for Ms.

Mehta and Mr.

50,000 of the stock options shall vest in equal quarterly increments during the first year of directorship;

an additional 37,500 shall vest in equal quarterly increments over the second and third year of the directorship, if re-elected;

if the director is not re-elected, any unvested options are cancelled.

For each year of committee service, Ms.

Mehta will receive an additional 15,500 options with vesting in equal quarterly increments, and Mr.

Paglia will receive an additional 16,750 options with vesting in equal quarterly increments.

Both agreements became effective as of December 1, 2021, and committee service commenced on February 10, 2022.

As of June 30, 2023, 89,417 options have vested for Ms.

Mehta, and 101,083 options have vested for Mr.

Paglia, pursuant to their independent director agreements.

Pension, Retirement or Similar Benefit Plans

With the exception of the executive officers that

are eligible for participation in the company 401(k) plan, there are currently no arrangements or plans in which we provide pension, retirement

or similar benefits for directors or executive officers.

Cash or non-cash compensation may be paid to our executive officers, including

stock options, at the discretion of the board of directors or a committee thereof.

Security Ownership

of Certain Beneficial Owners and Management and Related Stockholder Matters.

following table sets forth certain information with respect to the beneficial ownership of our common stock as of September

20, 2023, by:

of our named executive officers;

of our directors;

of our current directors and executive officers as a group;

person, or group of affiliated persons, who beneficially owned more than 5% of our common stock.

We have determined beneficial ownership in accordance

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community property laws.

The percentage of shares beneficially owned is computed

on the basis of 10,650,002 shares of common stock outstanding as of September 27, 2022.

Shares of common stock that a person has the right

to acquire within 60 days of September 27, 2022 are deemed outstanding for purposes of computing the percentage ownership of the

person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except

with respect to the percentage ownership of all directors and executive officers as a group.

Unless otherwise indicated, the address of

each beneficial owner in the table below is c/o Aeluma, 27 Castilian Drive, Goleta, CA 93117.

The percentage of shares beneficially owned is computed on the basis

of 12,167,930 shares of common stock outstanding as of September 20, 2023.

Shares of common stock that a person has the right to acquire

within 60 days of September 20, 2023 are deemed outstanding for purposes of computing the percentage ownership of the person holding

such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect

to the percentage ownership of all directors and executive officers as a group.

Unless otherwise indicated, the address of each beneficial

owner in the table below is c/o Aeluma, 27 Castilian Drive, Goleta, California 93117.

Directors and Named Executive Officers

Jonathan Klamkin, CEO, CFO and Director

Lee McCarthy, COO

1,645,745 (1)

DenBaars, Director

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Mark Tompkins (4)

2,632,500 (3)

Represents 46,542 shares that vested pursuant to her stock options and director agreement through September 27, 2022, and 10,916 shares that shall vest within 60 days following September 27, 2022 pursuant to the terms of her stock option and director agreement.

Represents 47,271 shares that vested pursuant to his stock options and director agreement through September 27, 2022, and 11,125 shares that shall vest within 60 days following September 27, 2022 pursuant to the terms of his stock option and director agreement, 10,000 options offered as per a consulting advisory agreement that terminated prior to his joining the board of directors, and 12,500 shares purchased in the 2021 offering.

(1) Represents

1,626,995 shares held by Mr.

Klamkin, 18,750 shares that vested pursuant to his stock options agreement through the date hereof.

Represents 101,375 shares that vested pursuant to Ms.

Mehta’s stock options and director agreement through the date hereof, and 3,875 shares that shall vest within the next 60 days pursuant to the terms of her stock options per director agreement.

Represents 12,500 shares held by Mr.

Paglia, 113,250 shares that vested pursuant to his stock options and director agreement through the date hereof, and 4,187 shares that shall vest within the next 60 days pursuant to the terms of her stock options per director agreement.

Includes 2,275,000 shares Mr.

Tompkins maintains

from his ownership before the Merger and 357,500 shares he purchased in the Offering for $715,000.

Tompkins served as our director

since inception;

Tompkins retains from his ownership before the Merger and 357,500 shares he purchased in the Offering for $715,000.

Tompkins served as our director since inception;

he resigned on the effective date of the Merger.

Assumes a buyback of 649,570 unvested shares following Mr.

McCarthy’s resignation for an aggregate purchase price of $4,001.

Securities Authorized for Issuance under Equity

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Equity Compensation Plan Information

(1) The number of shares reserved for issuance under our 2021 Plan

(as defined below) was initially 980,000;

such amount will increase automatically on January 1 of each of 2022 through 2031 by the

number of shares equal to the lesser of 5% of the total number of outstanding shares of our common stock as of the immediately

preceding December 31, or a number as may be determined by our board of directors.

On January 1, 2022, the number of shares reserved

for issuance was increased by 500,000 shares.

As of June 30, 2022, the number of shares available for future issuance under our 2021

Plan was 832,250.

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average excersice price of outstanding options, warrants and rights

Shares of common stock remaining available for future issuance under equity compensation plans

upon exercise

of outstanding

exercise price of

available for

Equity compensation plans approved by security holders

1,044,350 (1)

Equity compensation plans not approved by security holders

(1) The number of shares reserved for issuance under our 2021 Plan (as defined below) was initially 980,000;

such amount will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of 5% of

the total number of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined

by our board of directors.

On January 1, 2022 and 2023, the number of shares reserved for issuance was increased by 532,500 shares and

565,850 shares, respectively.

As of June 30, 2023, the number of shares available for future issuance under our 2021 Plan was 1,044,350.

Our 2021 Equity Incentive Plan

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preceding December 31, or a number as may be determined by our board of directors.

As of June 30, 2022, the number of shares available

for future issuance under our 2021 Plan was 832,250.

On January 1, 2022 and 2023, the number of shares reserved

for issuance was increased by 532,500 shares and 565,850 shares, respectively.

As of June 30, 2023, the number of shares available for

future issuance under our 2021 Plan was 1,044,350.

Certain Relationships and Related Transactions, and Director

Independence.

We describe below transactions since January 1,

2019, in which the amounts involved exceeded or will exceed $120,000 and any of our directors, executive officers, or beneficial holders

of more than 5% had or will have a direct or indirect material interest.

Other than as described below, there have not been transactions

to which we have been a party other than compensation arrangements, which are described under “ Executive Compensation .”

The following description is historical and has not been adjusted to give effect to the Merger.

On October 27, 2020, the Company entered into

a Stock Purchase Agreement with each of Mr.

Klamkin and Mr.

McCarthy, pursuant to which they each purchased 1,623,920 shares of common

stock (represented 1,250,000 shares of Biond prior to the Merger) for an aggregate sum of $10,000 each.

The stock purchase agreement contains

a vesting schedule such that 324,784 shares were fully vested as of October 27, 2020 and the remaining 1,299,136 shares vest monthly over

the next 4 years.

The unvested shares may be repurchased by the Company, at the Company’s option, within 90 days after the individual

is terminated from his position with the Company at the original purchase price.

On February 5, 2021, we entered into a Simple

Agreement for Future Equity Agreement (the “SAFE Agreement”) with each of Mr.

Klamkin, our CEO, Mr.

McCarthy, our COO and

DenBaars, one of our directors (each of whom is referred to as a “SAFE Holder”), pursuant to which each of them loaned

us $5,000, $5,000 and $50,000, respectively.

Pursuant to the SAFE Agreement, the SAFE Holder’s loan will convert into shares of

preferred stock if we complete a preferred stock private financing before the SAFE Agreement is terminated or the SAFE Holder shall be

entitled to a certain portion of the proceeds from a Dissolution Event or Liquidity Event, as such terms are defined in the SAFE Agreement.

Upon the earlier of the conversion to preferred stock or the payment to the SAFE Holder pursuant to Dissolution Event or Liquidity Event,

the SAFE Agreement shall automatically terminate.

On June 10, 2021, the parties agreed to convert the loans under the SAFE Agreement into

shares of our common stock.

Except as disclosed herein, no director, executive

officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct

or indirect, in any transaction, or proposed transaction since July 1, 2021, in which the amount involved in the transaction exceeds the

lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.

The Company is party to that certain Advisory

28 unchanged sentences

The indemnification agreements and our restated bylaws will require us to indemnify our directors to

the fullest extent not prohibited by DGCL.

Subject to very limited exceptions, our restated bylaws will also require us to advance expenses

incurred by our directors and officers.

the fullest extent not prohibited by Delaware General Corporation Law.

Subject to very limited exceptions, our restated bylaws will also

require us to advance expenses incurred by our directors and officers.

Promoters and Certain Control Persons

21 unchanged sentences

Tompkins, there are no promoters

being used in relation with this offering.

No persons who may, in the future, be considered a promoter will receive or expect

to receive any assets, services or other consideration from the Company.

being used in relation to this offering.

No person who may, in the future, be considered a promoter will receive or expect to

receive any assets, services or other consideration from the Company.

No assets will be or are expected to be acquired from any promoter on

2 unchanged sentences

The following table shows the fees that were billed

for the year ended June 30, 2022, the six months ended June 30, 2021, and the twelve months ended December 31, 2020

Twelve Months

Six Months Ended

Twelve Months

Ended December 31,

for the years ended June 30, 2023 and 2022.

Year Ended June 30,

Audit-related fees

22 unchanged sentences

board at the next meeting.

The audit fees that were paid to the auditors with respect to the transition period ended June 30, 2021

were pre-approved by the entire Board of Directors.

Prior to that time, before the Merger, the Company did not have a standing audit

committee or a committee performing similar functions.

Exhibit and Financial Statement Schedules

(a) Financial Statements

We have filed the financial

statements in Item 8.

We have filed the financial statements in Item

Financial Statements and Supplementary Data as a part of this report on Form 10-K.

The following is a list of all exhibits

filed or incorporated by reference as part of this report on Form 10-K.

and Plan of Merger and Reorganization among Parc Investments, Inc., Aeluma Operating Co.

The following is a list of all exhibits filed

or incorporated by reference as part of this report on Form 10-K.

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)

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)

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)

and Restated Bylaws.

(incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

of Lock Up Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

of Placement Agent Warrant (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

of Post-Merger Indemnification Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

of Pre-Merger Indemnification Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

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

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)

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)

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)

Amended and Restated Bylaws.

(incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

Form of Lock Up Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

Form of Placement Agent Warrant (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

Description of Securities

Form of Post-Merger Indemnification Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

Form of Pre-Merger Indemnification Agreement (incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

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)

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)

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)

13 unchanged sentences

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)

from Raich Ende Malter & Co.

LLP as to the change in certifying accountant, dated June 28, 2021 (incorporated by reference to

the Current Report on Form 8-K filed on July 1, 2021)

of the Registrant (Incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

Certification

of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification

of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification

of Chief Executive Officer and Principal Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002*

Subscription Agreement (incorporated by reference to the Current Report on Form 8-K filed on December 23, 2022)

Registration Rights Agreement (incorporated by reference to the Current Report on Form 8-K filed on December 23, 2022)

Code of Ethics

Subsidiaries of the Registrant (Incorporated by reference to the Current Report on Form 8-K filed on June 28, 2021)

Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002*

Certification of Principal Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002*

Audit Committee Charter

Nominating Committee Charter

Compensation Committee Charter

Inline XBRL Instance Document

22 unchanged sentences

the capacities indicated below on September 22, 2023.

Jonathan Klamkin

Chairman, Chief Executive

Officer, Principal Financial Officer and President

/s/ Jonathan Klamkin

Chairman, Chief Executive Officer, Principal Financial Officer and President

Jonathan Klamkin

(Principal Executive Officer & Principal Financial

Chief Operating Officer

(Principal Executive Officer & Principal Financial Officer)

/s/ Steven DenBaars

Steven DenBaars

/s/ Palvi Mehta

/s/ John Paglia

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-K

Item 9A. Controls and Procedures