What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-09 compared with 2023-05-15 · 178 added, 267 removed, 46 unchanged (91% of the section changed)

1 unchanged sentence

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION

The following information should be read in conjunction

with Aeluma, Inc.

and its subsidiaries (“we”, “us”, “our”, or the “Company”) unaudited

financial statements and the notes thereto contained elsewhere in this report.

Information in this Item 2, “Management’s

Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-Q that does not consist

of historical facts, are “forward-looking statements.” Statements accompanied or qualified by, or containing words such as

“may,” “will,” “should,” “believes,” “expects,” “intends,” “plans,”

“projects,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,”

“anticipates,” “presume,” and “assume” constitute forward-looking statements, and as such, are not

a guarantee of future performance.

Forward-looking statements are subject to risks

and uncertainties, certain of which are beyond our control.

Actual results could differ materially from those anticipated as a result

of the factors described in the “Risk Factors” and detailed in our other Securities and Exchange Commission (“SEC”)

Risks and uncertainties can include, among others, international, national and local general economic and market conditions:

demographic changes;

the ability of the Company to sustain, manage or forecast its growth;

the ability of the Company to successfully

make and integrate acquisitions;

raw material costs and availability;

new product development and introduction;

existing government regulations

and changes in, or the failure to comply with, government regulations;

adverse publicity;

the loss of significant customers

or suppliers;

fluctuations and difficulty in forecasting operating results;

changes in business strategy or development plans;

the ability to attract and retain qualified personnel;

the ability to obtain sufficient financing to continue and expand

business operations;

the ability to develop technology and products;

changes in technology and the development of technology and intellectual

property by competitors;

the ability to protect technology and develop intellectual property;

and other factors referenced in this and

previous filings.

Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results.

Because of these risks and uncertainties, the

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

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”).

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 our stockholders 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.

Prior to the Merger, the sole business purpose

of the Company was to seek the acquisition of or merger with, an existing company.

As a result of the consummation of the Merger,

on June 22, 2021, Biond Photonics, Inc.

became our wholly-owned subsidiary and the business of Biond Photonics, Inc.

became the business

of the Company going forward.

Accordingly, at the closing, the Company ceased to be a shell company.

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 a picture.

Our devices may incorporate

additional functionality and enhanced performance to enable 3D image capture when integrated into various system architectures.

This technology

has the potential to greatly 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 and has headquarters in Goleta, CA with a manufacturing

cleanroom to house this equipment.

Private Placement Offerings

2021 Offering

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

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 $1,082,575).

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

Agent Warrants”).

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.

A note payable to an officer of Parc Investments,

in the amount of $50,000 was repaid directly from the proceeds from the Offering.

Subject to certain customary exceptions, we 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.

2022 Offering

On December 22, 2022, we entered into subscription

agreements (the “2022 Subscription Agreement”) with 21 accredited investors (“Investors”), pursuant to which the

Investors purchased an aggregate of 517,000 shares of our common stock, par value $0.0001 per share at a per share purchase price of $3.00,

for aggregate gross proceeds of $1,551,000 before deducting placement agent fees and expenses of $124,385 (the “2022 Offering”).

We held a second closing of the 2022 Offering on January 10, 2023, pursuant to which we issued 214,667 shares of common stock for aggregate

gross proceeds of $644,000 before deducting placement agent fees and expenses of $28,640.

We held a third closing of the 2022 Offering

on March 31, 2023, pursuant to which we issued 715,665 shares of common stock for aggregate gross proceeds of $2,147,000 before deducting

placement agent fees and expenses of $117,830.

The three closings of the 2022 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 2022 Offering was sold to “accredited investors,” as defined in Regulation D, and was conducted on

a “reasonable best efforts” basis.

Unless otherwise stated or the context otherwise

indicates, references to “Aeluma,” the “Company,” “we,” “our,” “us,” or similar

terms refer to Aeluma, Inc.

and Subsidiary.

You should read the

following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements

and the related notes and other financial information included in this report.

Some of the information contained in this discussion and

analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes

forward-looking statements that involve risks and uncertainties.

You should review the disclosure under the heading “Risk Factors”

in other filings we make with the SEC for a discussion of important factors that could cause actual results to differ materially from

the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

not place undue reliance on forward-looking statements as predictive of future results.

We develop novel optoelectronic

devices for sensing and communications applications.

Aeluma has pioneered a technique to manufacture devices using high performance compound

semiconductor materials on large-diameter substrates that are commonly used to manufacture mass market microelectronics.

cost effective manufacturing of high-performance photodetector array circuits for imaging applications in mobile devices, as well as

other technologies.

Photodetector devices may be used as image sensors that generate an image by detecting light, in a manner similar

to a digital camera taking pictures.

Our devices may incorporate additional functionality for 3D image capture when integrated into various

system architectures.

This technology has the potential to enhance the performance and capability of camera image sensors, light detection

and ranging (LiDAR), augmented reality/virtual reality (AR/VR), facial recognition, and other applications.

Aeluma has acquired

key manufacturing equipment, and has headquarters in Goleta, California with a manufacturing cleanroom to house this equipment.

Because we will leverage

compound semiconductor materials, our devices may operate out to longer wavelengths, up to at least 1600 nm, which is advantageous for

a number of reasons including eye safety.

Beyond 1400 nm is considered eye safe at significantly higher optical power levels relative

to that at shorter wavelengths.

Therefore, for LiDAR sensing systems, the range (the detectable object distance) can be increased significantly.

Operating at specific longer wavelengths (for example, near 1550 nm) also enables imaging both in low light (dark) conditions, as well

as in direct sunlight.

Therefore, images could be captured outdoors and in various conditions.

Private Placement

Between December 2022 and May 2023, we entered

into subscription agreements (the “Subscription Agreement”) with certain accredited investors, pursuant to which we issued

an aggregate of 2,017,498 shares of our common stock, par value $0.0001 per share, at a per share purchase price of $3.00, for aggregate

gross proceeds of $6,052,500 (the “Offering”).

Pursuant to the Offering, we paid a cash placement agent fee of $389,200

and issued placement agent warrants to purchase up to 85,653 shares of common stock at an exercise price of $3.00 per share.

We also agreed

to pay certain expenses of the placement agent in connection with the Offering.

In connection with the Subscription Agreement,

the Company also entered into a Registration Rights Agreement with the Investors, pursuant to which the Company agreed to register all

of the shares of common stock issued in the 2022 Offering, including the shares of common stock underlying the warrant issued to the placement

Pursuant to the 2022 Offering, the Company has

paid a cash placement agent fee of $252,360 and issued placement agent warrants (“2022 Placement Agent Warrants”) to purchase

up to 40,720 shares of common stock at an exercise price of $3.00 per share.

We also agreed to pay certain expenses of the placement agent

in connection with the 2022 Offering.

we also entered into a Registration Rights Agreement with the Investors, pursuant to which we agreed to register all of the shares of

common stock issued in the Offering, including the shares of common stock underlying the warrant issued to the placement agent in this

registration statement.

The closings of the Offering were exempt from

registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder.

common stock in the Offering was sold to “accredited investors,” as defined in Regulation D, and was conducted on a “reasonable

best efforts” basis.

Departure and Appointment of Directors and Officers

Lee McCarthy resigned from his position as interim

Chief Financial Officer on August 18, 2021 and from his directorship on December 1, 2021.

McCarthy’s vacancy on the

board, we appointed Ms.

Mehta is a Class II director.

On December 1, 2021, we also appointed Mr.

John Paglia to the

board of directors;

Paglia is a Class I director.

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 us on any matter related to the operations, policies, or practices of us.

Plan of Operations

We have been developing our materials and characterization

capabilities at our headquarters in Goleta, CA, in connection with the further development of our business and the implementation of our

plan of operations.

capabilities at our headquarters in Goleta, California, in connection with the further development of our business and the implementation

of our plan of operations.

We have installed some key manufacturing equipment at our headquarters and will continue to develop relationships

6 unchanged sentences

equipment vendors.

The COVID-19 pandemic has adversely disrupted, and may further disrupt, the operations at certain of our suppliers

and other third-party providers.

Lead times for certain materials and parts ordered have been longer than anticipated and on-site support

for equipment maintenance has been challenging to schedule.

Spare parts have been procured to minimize disruption to our development.

The rapid prototyping facility that we access for development was closed for a brief period of time at the start of the COVID-19 pandemic.

It has been open for unlimited access since Aeluma has first gained access.

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 financing during June/July

We have also leveraged funds to continue strengthening our intellectual property including patent applications, trademarks, and

development of trade secrets and manufacturing process recipes.

We will continue to develop our manufacturing and product development

strategy by further engaging customers and strategic partners.

The primary sources of funding for equipment

procurement and installation are the seed funding raised prior to becoming a public company and the funding raised from our financings.

We have also leveraged funds to continue strengthening our intellectual property including patent applications, trademarks, and development

of trade secrets and manufacturing process recipes.

We will continue to develop our manufacturing and product development strategy by

further engaging customers and strategic partners.

Limited Operating History

6 unchanged sentences

Equity financing will result in dilution to existing stockholders.

Components of Results

of Operations

Our revenue currently

consists of commercial product sales and government contracts.

Operating Expenses

The cost of revenue

consists of costs of materials, as well as direct compensation and expenses incurred to provide deliverables that resulted in payment

of our success fee and wafers delivered.

We anticipate that our cost of revenue will vary substantially depending on the nature of products

and/or services delivered in each customer engagement.

Research and development expenses consist primarily of compensation

and related costs for personnel, including stock-based compensation and employee benefits, costs associated with design, fabrication,

packaging and testing of our devices, and facility lease and utility expenses.

We expense research and development expenses as incurred.

General and administrative expenses consist primarily of compensation

and related costs for personnel, including stock-based compensation and employee benefits.

In addition, general and administrative

expenses include third-party consulting, legal, insurance, audit and accounting services.

Other income, net of

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

Income Tax Expense

Income tax expense consists primarily of

income taxes in certain state jurisdictions in which we conduct business.

Results of Operations

Nine months ended March 31, 2023 compared

to the nine months ended March 31, 2022

Our results of operations for the nine-month period

ended March 31, 2023, as compared to the nine-month period ended March 31, 2022, were as follows (some balances on the prior period’s

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

Nine Months Ended

Three months ended September 30, 2023 compared

to the three months ended September 30, 2022

Our results of operations for the three-month

period ended September 30, 2023, as compared to the three-month period ended September 30, 2022, were as follows:

Three Months Ended

September 30,

Operating expenses

3 unchanged sentences

$ (1,530,041 )

$ (1,930,669 )

Net revenue :

We are pre-revenue and, accordingly

recorded no revenues for either the nine months ended March 31, 2023 or 2022.

We recognized our revenue of

$32,400 from product sales for sampling purchases for the three months ended September 30, 2023.

Operating expenses :

During the nine months

ended March 31, 2023 and 2022, we incurred $4,290,077 and $2,370,005, respectively, of operating expenses.

This increase was due to the

start-up of operations and stock-based compensation expenses related to employees, advisors and consulting agreements.

Sub-lease rental income and other income:

During the nine months ended March 31, 2023 and 2022, the Company recorded net rental and other income of $218,686 and $229,283, respectively.

The decrease was due to the reduced rental space to a sub-lease to our tenant, offset by an increase in other income.

Operating expense

decreased $51,576 to $1,515,111 for the three months ended September 30, 2023 from $1,566,687 for the same period in 2022, due primarily

to a reduction in insurance expense offset by increased research and development activities and stock-based compensation expenses.

Other income:

Other income decreased $36,244

to $402 for the three months ended September 30, 2023 from $36,646 for the same period in 2022.

The decrease was due primarily to a $31,351

decrease in sub-lease income as the sublease ended in March 2023.

Income tax expense :

The Company did not

record income tax expense for either of the nine months ended March 31, 2023 and 2022, as such amounts are insignificant.

Net loss was $4,071,391 for the

nine months ended March 31, 2023, as compared to $2,140,722 for the same period of 2022 for start-up of operations and stock-based compensation

expenses related to employees, advisors and consulting agreements.

We did not record

income tax expense for either of the three months ended September 30, 2023 and 2022.

Impact of COVID-19

With the exception of some lingering supply chain

challenges, the residual effects of the COVID-19 pandemic did not have a significant impact on the Company's results of operations or

financial condition for the three months ended September 30, 2023.

Capital Resources and Liquidity

Our financial statements have been presented on

the basis that are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course

As presented in the financial statements, we incurred a net loss of $4,071,391 for the nine months ended March 31, 2023 and

losses are expected to continue in the near term.

The accumulated deficit was $7,753,875.

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.

ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable

revenues and profitable operations.

At March 31, 2023, we had $4,857,255 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;

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 $1,482,309 and $1,530,041 for the

three months ended September 30, 2023 and 2022, respectively, and losses are expected to continue in the near term.

The accumulated deficit

was $10,544,375 at September 30, 2023.

We have been funding our operations through private loans and the sale of common stock in private

placement transactions.

Management anticipates that significant additional expenditures will

be necessary to develop and expand our business before significant positive operating cash flows can be achieved.

Our ability to continue

as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable

At September 30, 2023, we had $3,757,227 of cash and cash equivalents.

These funds are insufficient to complete our business

plan and as a consequence, we will need to seek additional funds, primarily through the issuance of debt or equity securities for cash

to operate our business.

No assurance can be given that any future financing will be available or, if available, that it will be on terms

that are satisfactory to us.

Even if we are able to obtain additional financing, it may contain undue restrictions on our operations,

in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing.

Management has undertaken

steps as part of a plan to improve operations with the goal of sustaining our operations for the next twelve months and beyond.

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.

We had net working capital of $4,538,999 and $4,058,409

at March 31, 2023 and June 30, 2022, respectively.

Current assets increased $893,963 to $5,324,811 at March 31, 2023 from $4,430,848 at

June 30, 2022, primarily due to the 2022 Offering, primarily offset by net loss of $4,071,391 for the nine months ended March 31, 2023.

Current liabilities increased $413,373 to $785,812 at March 31, 2023 from $372,439 at June 30, 2022, due primarily to a $343,548 increase

in spending activities in accounts payable.

and (c) executing material

sales or research contracts.

There can be no assurance that we can successfully accomplish these steps and it is uncertain that we will

achieve a profitable level of operations and obtain additional financing.

There can be no assurance that any additional financing will

be available to us on satisfactory terms and conditions, if at all.

As of the date of this Report, we have not entered into any formal

agreements regarding the above.

In the event we are

unable to continue as a going concern, the Company may elect or be required to seek protection from its creditors by filing a voluntary

petition in bankruptcy or may be subject to an involuntary petition in bankruptcy.

To date, management has not considered this alternative,

nor does management view it as a likely occurrence.

We had working capital of $3,421,346 and $4,576,807 at September 30,

2023 and 2022, respectively.

Current assets decreased $1,313,839 to $4,020,067 at September 30, 2023 from $5,333,906 at June 30, 2023,

primarily due to a $1,314,463 decrease in cash.

Current liabilities decreased $158,378 to $598,721 at September 30, 2023 from $757,099

at June 30, 2022, due primarily to decreases in accounts payable.

The following table shows a summary of our cash

flows for the periods presented:

Nine Months Ended March 31,

Three Months Ended September 30,

Net cash (used in) provided by:

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$ (1,316,739 )

$ (1,282,194 )

Investing activities

Financing activities

Increase (decrease) in cash

(Decrease) increase in cash

$ (1,314,463 )

$ (1,369,399 )

Net cash used in our operating activities were

$2,699,033 and $1,416,839 for the nine months ended March 31, 2023 and 2022, respectively.

The increase of $1,282,194 was due mainly to

a $1,930,669 increase in net loss.

$1,303,362 and $1,316,739 for the three months ended September 30, 2023 and 2022, respectively, due primarily to net losses of $1,482,309

and $1,530,041, respectively.

Net cash used in our investing activities was

$255,579 and $716,499 for the nine months ended March 31, 2023 and 2022, respectively.

Investing activity for the nine months ended March

31, 2022 was related to the setup of our new facility.

Our financing activities generated a cash inflow

of $4,071,145 and $161,930 for the nine months ended March 31, 2023 and 2022, respectively, due to the offerings described above.

$7,100 and $52,660 for the three months ended September 30, 2023 and 2022, respectively.

Investing activities include purchase of equipment

and payment for leasehold improvements.

Net cash used in our financing activities was

$4,001 for the three months ended September 30, 2023, compared to none for the same period of 2022.

We paid $4,001 to purchase Lee

McCarthy’s unvested restricted shares.

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 Annual Report

on Form 10-K for the year ended June 30, 2022.

During the nine months ended March 31, 2023, there were no significant changes

in our critical accounting policies.

is included in our Annual Report on Form 10-K for the year ended June 30, 2023.

During the three months ended September 30,

2023, there were no significant changes in our critical accounting policies.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis