What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-09-27 compared with 2023-09-25 · 306 added, 286 removed, 320 unchanged (65% of the section changed)

Financial Statements and Supplementary Data.

Index to Consolidated Financial Statements

Financial Statements and Supplementary

Index to Consolidated

Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB No.

4 unchanged sentences

Notes to Consolidated Financial Statements F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Stockholders of

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheets of Aeluma, Inc.

and Subsidiary (the Company) as of June 30, 2023 and 2022, and the related consolidated statements of

operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2023, and the related

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

and Stockholders of

Opinion on the Consolidated

Financial Statements

We have audited the accompanying

consolidated balance sheets of Aeluma, Inc.

and Subsidiary (the Company) as of June 30, 2024 and 2023, and the related consolidated statements

of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2024, and the related

notes (collectively referred to as the consolidated financial statements).

3 unchanged sentences

generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements,

the Company has incurred significant operating losses and negative cash flows from operations, and has generated limited revenue.

conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard

to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Explanatory Paragraph

– Going Concern

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated

financial statements, the Company has incurred significant operating losses and negative cash flows from operations, and has generated

limited revenue.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) “PCAOB” and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of

the Company’s internal control over financial reporting.

These consolidated financial

statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) “PCAOB” and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit

in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not

required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we

are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

Our audit included performing

procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing

procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit

provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below

The critical audit matters

are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated

3 unchanged sentences

We determined that there are no critical audit matters.

Rose, Snyder & Jacobs LLP

We have served as the Company’s auditor

Snyder & Jacobs LLP

Rose, Snyder &

We have served as the

Company’s auditor since 2021

Encino, California

5 unchanged sentences

Accounts receivable

Deferred compensation, current portion

Deferred compensation

Prepaids and other current assets

4 unchanged sentences

Property and equipment, net

Intangible assets

Right of use asset - facility

Deferred compensation, long term portion

Intangible assets, net

Right of use asset - operating

Liabilities and stockholders’ equity

5 unchanged sentences

Lease liability, long term portion

Commitments and contingencies

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $ 0.0001 par value:

10,000,000 shares authorized, and none issued and outstanding at June 30, 2023 and 2022

10,000,000 authorized, and none issued and outstanding at June 30, 2024 and 2023

Common stock, $ 0.0001 par value:

50,000,000 shares authorized at June 30, 2023 and 2022, and 12,817,500 and 10,650,002 shares issued and outstanding at June 30, 2023 and 2022, respectively

50,000,000 shares authorized, and 12,178,424 and 12,817,500 shares issued and outstanding at June 30, 2024 and 2023, respectively

Additional paid-in capital

5 unchanged sentences

The accompanying notes are an integral part of

consolidated financial statements.

these financial statements

and Subsidiary

Consolidated Statements of Operations

Year Ended June 30,

Revenue (Note 2)

Operating expenses:

2 unchanged sentences

General and administrative

Total expenses

Total operating expenses

Loss from operations

4 unchanged sentences

Interest income

Total other income

Loss before provision for income tax

Total other income, net

Loss before income tax expense

( 4,562,295 )

3 unchanged sentences

$ ( 5,379,582 )

Basic and diluted loss per share

Loss per share - basic and diluted

Weighted average common shares outstanding - basic and diluted

The accompanying notes are an integral part of

consolidated financial statements.

these financial statements

and Subsidiary

Consolidated Statements of Changes in Stockholders’

Consolidated Statement of Stockholders’

Stockholders’

1 unchanged sentence

$ ( 3,682,484 )

Issuance of common stock, net of offering cost of $ 1,059,505 (Note 3)

Other offering costs

Issuance of common stock, net of offering costs of $ 411,015 (Note 3)

Issuance of common stock for services (Note 4)

Stock-based compensation

3 unchanged sentences

$ ( 9,062,066 )

Issuance of common stock, net of offering cost of $ 411,015 (Note 3)

Issuance of common stock for service (Note 4)

Repurchase of common stock (Note 3)

Stock warrant exercised

Stock-based compensation

4 unchanged sentences

The accompanying notes are an integral part of

consolidated financial statements.

these financial statements

and Subsidiary

7 unchanged sentences

Amortization of deferred compensation

Partial refund of facility lease deposit

Lessor incentive

Stock-based compensation expense

12 unchanged sentences

Financing activities:

Repurchase of common stock

Proceeds from Private Placement, net of offering costs

Payment of other offering costs

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Net change in cash

3 unchanged sentences

The accompanying notes are an integral part of

consolidated financial statements.

these financial statements

and Subsidiary

Notes to Consolidated Financial Statements

Note 1 – Business

Note 1 – The Company

Aeluma, Inc., headquartered in Goleta, California,

6 unchanged sentences

driver assistance systems vehicles (ADAS), topography, wind, industrial) markets.

On June 22, 2021, Biond Photonics, Inc.,

a privately held California corporation (“Biond Photonics”) merged with and into our wholly owned subsidiary, Aeluma Operating

Co., a corporation formed in the State of Delaware on June 22, 2021 (“Acquisition Sub”).

Pursuant to this transaction

(the “Merger”), Acquisition Sub was the surviving corporation and remained our wholly owned subsidiary, and all the outstanding

stock of Biond Photonics was converted into shares of our common stock.

As a result of the Merger, the Company acquired the business

of Biond Photonics and continued the existing business operations of Biond Photonics as a public reporting company under the name Aeluma,

Going Concern

2 unchanged sentences

In addition, the Company is in the research and development stage and has generated limited revenue to date.

In order to support its

operations, the Company will require additional infusions of cash from the sale of equity instruments or the issuance of debt instruments,

or the commencement of profitable revenue generating activities.

If adequate funds are not available or are not available on acceptable

terms, the Company’s ability to fund its operations, develop or enhance its sensors in the future or respond to competitive pressures

would be significantly limited.

In order to support its operations,

the Company will require additional infusions of cash from the sale of equity instruments or the issuance of debt instruments, or the

commencement of profitable revenue generating activities.

If adequate funds are not available or are not available on acceptable terms,

the Company’s ability to fund its operations, develop or enhance its sensors in the future or respond to competitive pressures would

be significantly limited.

Such limitations could require the Company to curtail, suspend or discontinue parts of its business plan.

1 unchanged sentence

ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with GAAP, which contemplate

continuation of the Company as a going concern.

The financial statements do not include any adjustments relating to the recoverability

and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this

The financial statements do not include any adjustments that might be necessary should the Company be unable to continue

as a going concern.

The accompanying financial statements have been prepared in conformity with U.S.

Generally Accepted

Accounting Principles (“GAAP”), which contemplate continuation of the Company as a going concern.

The financial statements

do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification

of liabilities that could result from the outcome of this uncertainty.

The financial statements do not include any adjustments that might

be necessary should the Company be unable to continue as a going concern.

Note 2 – Summary of Significant Accounting Policies

1 unchanged sentence

The accompanying consolidated financial statements

have been presented in accordance with generally accepted accounting principles in the United States (“GAAP”).

The summary of significant accounting policies

presented below is designed to assist in understanding the Company’s financial statements.

Such financial statements and accompanying

notes are the representations of the Company’s management, who is responsible for the Company’s integrity and objectivity.

have been presented in accordance with GAAP.

The summary of significant accounting policies presented below is designed to assist in understanding

the Company’s financial statements.

Such financial statements and accompanying notes are the representations of the Company’s

management, who is responsible for the Company’s integrity and objectivity.

Use of Estimates and Assumptions

9 unchanged sentences

the estimates and the actual results, future results of operations will be affected.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified

for consistency with the current year presentation.

These reclassifications had no effect on the reported consolidated financial statements.

Cash and Cash Equivalents

8 unchanged sentences

Fair Value of Financial Instruments

As defined in Financial Accounting Standards

Board (“FASB”) ASC Topic No.

820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value

is the price that would be received to sell an asset or paid to transfer the liability in an orderly transaction between market participants

As defined in Financial Accounting Standards Board

(“FASB”) ASC Topic No.

820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is the

price that would be received to sell an asset or paid to transfer the liability in an orderly transaction between market participants

at the measurement date.

28 unchanged sentences

over the estimated useful lives of the assets.

Leasehold improvements are amortized over the remaining lease term.

Repairs and maintenance

to these assets are charged to expense as incurred;

major improvements enhancing the function and/or the asset’s useful life are

When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains

or losses arising from such transactions are recognized.

Leasehold improvements are amortized over the less of the remaining lease term or the estimated

useful lie of the improvements.

Repairs and maintenance to these assets are charged to expenses as incurred;

major improvements enhancing

the function and/or the asset’s useful life are capitalized.

When items are sold or retired, the related cost and accumulated depreciation

are removed from the accounts and any gains or losses arising from such transactions are recognized.

Intangible Assets

2 unchanged sentences

Revenue Recognition

The Company follows a five-step approach for

recognizing revenue, consisting of the following:

The Company follows a five-step approach for recognizing

revenue, consisting of the following:

(1) identifying the contract with a customer;

(2) identifying the performance obligations

in the contract;

(2) identifying the performance obligations in the

(3) determining the transaction price;

3 unchanged sentences

with revenue-producing activities are excluded from revenue.

Incidental items that are immaterial in the context of the contract are

recognized as expense.

The Company does not have any significant financing components associated

with its revenue contracts, as payment is received within one

Revenue will be recognized at a point in time when the product is shipped or is delivered

to the customer’s location.

Revenue is principally generated under research and development contracts with

agencies of the U.S.

Incidental items that are immaterial in the context of the contract are recognized

The Company does not have any significant financing components associated with its revenue contracts, as payment is received

within one year.

Commercial product and service contracts:

Revenue is currently generated from multiple customers for research and development related services and small-volume orders

Government contracts:

Revenue is principally generated under research and development contracts with agencies of the U.S.

government or with prime contractors.

These contracts may include cost

reimbursement and fixed firm price terms.

company recogni zed its revenue of $ 193,339 , consisting of $ 15,000 from product sales and $ 178,339 from a government contract,

primarily for sampling purchases and research and development, for the year ended June 30, 2023.

These contracts may include cost reimbursement and fixed firm price terms.

the year ended June 30, 2024, the Company was awarded six government contracts of $ 1,323,237 for

providing services and delivering materials.

The awards are firm fixed contracts that shall be paid upon completion of performance and

recognized as revenue over an expected term of 12 months.

For the year ended June 30, 2024, the Company

recognized its revenue of $ 918,554 , of which $ 853,798 was from government contracts and $ 64,756 was from product sales for sampling purchases.

As of June 30, 2024, the aggregate amount to remaining performance obligations for the government contracts was $ 690,825 .

Loss Per Share

57 unchanged sentences

Recent Accounting Pronouncements

The Company has evaluated all issued but not yet effective accounting

pronouncements and determined that they are either immaterial or not relevant to the Company.

The Company has evaluated all issued but not yet

effective accounting pronouncements and determined that they are either immaterial or not relevant to the Company.

Note 3 – Stockholders’ Equity

The Company’s

Articles of Incorporation authorize the issuance of two classes of shares of stock.

The total number of shares which this corporation

is authorized to issue is 50,000,000 shares of $ 0.0001 par value common stock and 10,000,000 of $ 0.0001 par

value preferred stock.

No preferred shares were issued as of June 30, 2023.

Stock Offering

following the Merger, on June 22, 2021, the Company sold 3,482,500 shares of common stock pursuant to an initial closing of

a private placement offering at a purchase price of $ 2.00 per share, with gross proceed of $ 6,965,000 (before deducting placement

agent fees and expenses of $ 949,736 ).

The Company held a second closing on June 28, 2021 for an additional 402,500 shares of

common stock, with gross proceed of $ 805,000 (before deducting placement agent fees and expenses of $ 109,769 ), and a third and final

close on July 1, 2021 for an additional 115,000 , with gross proceed of $ 230,000 (before deducting placement agent fees and expenses

of $ 23,070 ).

Accordingly, the Company sold a total of 4,000,000 shares of common stock with total gross proceeds of $ 8,000,000 (before

deducting total placement agent fees and expenses of $ 1,082,577 ).

December 12, 2022, the Company sold an aggregate of 517,000 shares of common stock in a private placement offering at a price

of $ 3.00 per share, with gross proceeds of $ 1,551,000 (before deducting placement agent fees and expenses of $ 124,385 ).

10, 2023, the Company held a second closing for an additional 214,667 shares of common stock, with gross proceeds of $ 644,000 (before

deducting placement agent fees and expenses of $ 28,640 ).

Authorized Shares

The Company’s Articles of Incorporation

authorize the issuance of two classes of shares of stock.

The total number of shares which this corporation is authorized to issue is 50,000,000 shares

of $ 0.0001 par value common stock and 10,000,000 of $ 0.0001 par value preferred stock.

No preferred shares

were issued as of June 30, 2024.

On December 12, 2022, the Company sold an aggregate

of 517,000 shares of common stock in a private placement offering (the “Offering”) at a price of $ 3.00 per

share, with gross proceeds of $ 1,551,000 (before deducting placement agent fees and expenses of $ 124,385 ).

On January 10, 2023, the

Company held a second closing for an additional 214,667 shares of common stock, with gross proceeds of $ 644,000 (before deducting

placement agent fees and expenses of $ 28,640 ).

On March 31, 2023, the Company held a third closing for an additional 715,665 shares

of common stock, with gross proceeds of $ 2,147,000 (before deducting placement agent fees and expenses of $ 117,830 ).

10, 2023, the Company held a fourth and final close for additional 570,166 shares of its common, with gross proceeds of $ 1,710,500

(before deducting placement agent fees and expenses of $ 140,160 ) .

the Company sold a total of 2,017,498 shares of common stock with a total gross proceeds of $ 6,052,500 (before deducting

total placement agent fees and expenses of $ 411,015 ) in this private placement.

The two private placement offerings held above are together

referred to herein as the “Offering.”

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

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.

and Vested Shares to Officers

On October 27,

2020, the Company issued 1,623,920 shares of common stock to Jonathan Klamkin, Director and Chief Executive Officer, and 1,623,920

shares of common stock to Lee McCarthy, Director, interim Chief Financial Officer and Chief Operations Officer, for an aggregate sum of

$10,000 each.

Initially 20% or 324,784 shares vested on October 27, 2020, and the remaining 1,299,136 shares vest in equal amounts, monthly

over the subsequent 4 years.

The stock purchase agreement contains a repurchase option whereby unvested shares may be repurchased by the

Company, at the Company’s option, within 90 days after employee termination.

At June 30 2023, Jonathan Klamkin had 1,190,875 vested

shares and 433,045 unvested shares, and Lee McCarthy had 974,350 vested shares and 649,570 unvested shares.

Lee McCarthy left the Company in November 2022.

Rights Agreement

entered into a registration rights agreement that provides for certain liquidated damages upon the occurrence of a “Registration

Event,” which is defined as the occurrence of any of the following events:

(a) the Company fails to file with the Commission the

Registration Statement on or before the Registration Filing Date;

(b) the Registration Statement is not declared effective by the Commission

on or before the Registration Effectiveness Date;

remain effective or the Holders of Registrable Securities covered thereby are otherwise not permitted to utilize the prospectus therein

to resell the Registrable Securities covered thereby, except for Blackout Periods permitted herein;

or (d) following the listing or inclusion

for quotation on an Approved Market, the Registrable Securities, if issued and outstanding, are not listed or included for quotation on

an Approved Market, or trading of the Common Stock is suspended or halted on the Approved Market, which at the time constitutes the principal

markets for the Common Stock, for more than three (3) full, consecutive Trading Days (other than as a result of (A) actions or inactions

of parties other than the Company or its affiliates or of the Approved Market not reasonably in the control of the Company, or (B) suspension

or halt of substantially all trading in equity securities (including the Common Stock) on the Approved Market).

The maximum amount of

liquidated damages that may be paid by the Company shall be an amount equal to eight percent ( 8 %) of the shares covered by the registration

rights agreement.

This filing covered 11,010,002 shares.

The Company currently expects to satisfy all of its obligations under

the Registration Agreement and does not expect to pay any damages pursuant to this agreement;

On May 10, 2023,

the Company held a fourth and final close for additional 570,166 shares of its common, with gross proceeds of $ 1,710,500 (before

deducting placement agent fees and expenses of $ 140,160 ).

Accordingly, the Company sold a total of 2,017,498 shares of common

stock with a total gross proceeds of $ 6,052,500 (before deducting total placement agent fees and expenses of $ 411,015 ) in this private

The Offering was 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”

Issued and Vested Shares to Officers

On October 27, 2020, the Company issued

1,623,920 shares of common stock to Jonathan Klamkin, Director and Chief Executive Officer, and 1,623,920 shares of common stock to Lee

McCarthy, Director, interim Chief Financial Officer and Chief Operations Officer, for an aggregate sum of $ 10,000 each.

Initially 20 %

or 324,784 shares vested on October 27, 2020, and the remaining 1,299,136 shares vest in equal amounts, monthly over the subsequent 4

The stock purchase agreement contains a repurchase option whereby unvested shares may be repurchased by the Company, at the Company’s

At June 30 2024, Jonathan Klamkin had 1,515,659 vested shares and 108,261 unvested shares, and Lee McCarthy

had 974,350 vested shares.

On November 17, 2022, Lee McCarthy left the Company and, on September 10, 2023, the Company exercised

its option to purchase 649,570 unvested restricted shares Lee McCarthy held for a total consideration of $ 4,001 , the initial

purchase price of these shares.

Registration Rights Agreement

The Company entered into a registration rights

agreement that provides for certain liquidated damages upon the occurrence of a “Registration Event,” which is defined as

the occurrence of any of the following events:

(a) the Company fails to file with the Commission the Registration Statement on or before

the Registration Filing Date;

(b) the Registration Statement is not declared effective by the Commission on or before the Registration

Effectiveness Date;

of Registrable Securities covered thereby are otherwise not permitted to utilize the prospectus therein to resell the Registrable Securities

covered thereby, except for Blackout Periods permitted herein;

or (d) following the listing or inclusion for quotation on an Approved

Market, the Registrable Securities, if issued and outstanding, are not listed or included for quotation on an Approved Market, or trading

of the Common Stock is suspended or halted on the Approved Market, which at the time constitutes the principal markets for the Common

Stock, for more than three (3) full, consecutive Trading Days (other than as a result of (A) actions or inactions of parties other than

the Company or its affiliates or of the Approved Market not reasonably in the control of the Company, or (B) suspension or halt of substantially

all trading in equity securities (including the Common Stock) on the Approved Market).

The maximum amount of liquidated damages that may

be paid by the Company shall be an amount equal to eight percent ( 8 %) of the shares covered by the registration rights agreement.

filing covered 11,010,002 shares.

The Company currently expects to satisfy all of its obligations under the Registration Agreement

and does not expect to pay any damages pursuant to this agreement;

therefore, no liability has been recorded.

1 unchanged sentence

Restricted Stock Awards

During the six months ended June 30, 2021, the

Company sold 723,008 shares of common stock to certain individuals in exchange for future management advisory services, for

discounted prices price ranging from $ .0104 to $ .0195 per share.

The shares are subject to restrictions that allow for repurchase

of the shares by the Company due to a termination of the service agreement or other certain provisions.

This repurchase right declines

on a pro-rata basis over vesting periods (corresponding to the service period) ranging from 2 - 4 years.

Related to these issuances,

the Company has recorded deferred compensation of $ 1,372,435 for the value of the shares in excess of the purchase price paid by

the advisors.

The deferred compensation will be expensed as consulting expense in the consolidated statements of operation over the service

For each of the years ended June 30, 2023 and 2022, $ 662,464 has been amortized in the consolidated statements of operations,

and $ 11,034 is presented as part of the current portion of deferred compensation on the consolidated balance sheets at June 30, 2023.

2022, the Company signed an agreement to issue 150,000 shares of common stock valued at $ 300,000 to a consultant for providing

consulting services to the Company for eighteen months.

Related to these issuances, the Company has recorded deferred compensation

of $ 300,00 which will be expensed as consulting expense in the consolidated statements of operation over the eighteen months.

the year ended June 30, 2023, $ 258,000 has been amortized in the consolidated statements of operations and $ 42,000 is presented

as part of the current portion of deferred compensation on the consolidated balance sheet at June 30, 2023.

In June 2021, the Company sold 723,008 shares

of common stock to certain individuals in exchange for future management advisory services, for discounted prices price ranging from $ .0104 to

$ .0195 per share.

The shares are subject to restrictions that allow for repurchase of the shares by the Company due to a termination

of the service agreement or other certain provisions.

This repurchase right declines on a pro-rata basis over vesting periods (corresponding

to the service period) ranging from 2 - 4 years.

Related to these issuances, the Company has recorded deferred compensation of

$ 1,372,435 for the value of the shares in excess of the purchase price paid by the advisors.

The deferred compensation was expensed

as consulting expense in the consolidated statements of operation over the service period.

In March 2022, the Company signed an agreement

to issue 150,000 shares of common stock valued at $ 300,000 to a consultant for providing consulting services to the Company

for eighteen months.

Related to these issuances, the Company has recorded deferred compensation of $ 300,000 which was expensed as consulting

expense in the consolidated statements of operation over the eighteen months.

For the years ended June 30, 2024 and 2023, $ 32,900

and $ 920,464 , respectively, have been amortized in the consolidated statements of operations.

At June 30, 2024, $ 20,133 of deferred compensation

included in the balance sheets is expected to be expensed within 12 months.

The following is a schedule summarizing restricted

4 unchanged sentences

Stock Options

2021, the Company issued an option to purchase 10 ,000 shares of common stock to a director at a price of $ 2.00 per share,

expiring in 10 years, and an option to purchase 10,000 shares of common stock to an advisor at a price of $ 2.00 per

share expiring in 5 years.

These options vested over periods ranging from one month to three months.

2021, the Company issued options to purchase common stock to two directors in increments of 125,000 each.

The options have an exercise

price of $2.00, expire in 10 years, vest 12,500 options per quarter in the first year and 9,375 per quarter for the following two years.

2022, the company granted 16,750 in options to one director and 15,500 to another director at a price of $2.00 per share, for committee

These options are subject to quarterly vesting over four quarters and expire in 10 years.

On February 1, 2022, the

Company entered into a consulting advisory agreement which grants 2,500 options with every patent filing.

On February 4,

2022, the advisor was granted 2,500 options with an exercise price of $ 2.00 and an expiration date of ten years .

2022, the Company issued 513,000 options to purchase common stock to employees.

The options have an exercise price of $ 2.00 and

expire in 10 years with 25 % vesting after one year and the remainder scheduled to vest each quarter for three

years, subject to the continued status as an employee to the Company through each vesting date.

During the three months ended December 31, 2022,

the Company issued 161,000 options to purchase common stock to employees.

The options have an exercise price of $ 2.00 or $2.

expire in 10 years with various vesting schedules from six months to 48 months, subject to the continued status as an employee to the

Company through each vesting date.

three months ended March 31, 2023, the Company issued 109,750 options to purchase common stock to employees and directors.

options have an exercise price of $ 3.00 and expire in 10 years with various vesting schedules from 12 months to 48 months.

Stock options granted to employees are subject to the continued status as an employee to the Company through each vesting date.

the three months ended March 31, 2023, the Company also issued 37,500 conditional options to purchase common stock to non-employee

The options have an exercise price of $ 3.00 and expire in 10 years, vesting on the date when certain vesting

conditions are met.

During the three months ended

June 30, 2023, the Company issued 163,000 options to purchase common stock to employees.

The options expire in 10 years and

have an exercise price of $ 2.60 with immediate vesting or $ 3.00 with a vesting schedule of 48 months.

Stock options granted to employees

are subject to the continued status as an employee to the Company through each vesting date.

The options have an exercise price of $ 2.00 or $ 2.10 and expire

in 10 years with various vesting schedules from nine months to 48 months, subject to the continued status as an employee to the Company

through each vesting date.

During the three months ended June 30, 2023, the

Company issued 163,000 options to purchase common stock to a consultant and employees.

The options expire in 10 years and have

an exercise price of $ 2.60 with immediate vesting or $ 3.00 with a vesting schedule of 48 months.

Stock options granted to employees are

subject to the continued status as an employee to the Company through each vesting date.

During the three months ended September 30, 2023,

the Company issued 6,500 options to purchase common stock to consultants.

The options expire in 10 years and have an exercise

price that range from $ 2.90 to $ 3.90 with immediate vesting.

During the three months ended December 31, 2023,

the Company issued 7,000 options to purchase common stock to a consultant.

The options expire in 10 years and have an exercise

price that ranges from $ 2.50 to $ 3.43 with immediate vesting.

During the three months ended March 31, 2024,

the Company issued 6,500 options to purchase common stock to consultants.

The options expire in 10 years and have an exercise

price that range from $ 2.99 to $ 3.50 with immediate vesting.

During the three months ended March 31, 2024, the Company issued 100,821

options to purchase common stock to board of directors.

The options expire 10 year and vest in nine months with an exercise price of $ 2.99 .

The Company estimates the fair value of each option

1 unchanged sentence

The Company used the following assumptions for to estimate the fair value of stock

options for directors issued for the years ended June 30, 2023 and 2022:

options for the period presented:

Year Ended June 30,

2 unchanged sentences

105 % - 114 %

100 % - 134 %

Expected term

5.0 years - 6.2 years

5.0 years - 7.0 years

Dividend yield

2 unchanged sentences

1.26 % - 4.24 %

For the years ended June 30, 2023 and 2022,

stock-based compensation expenses for options granted were $ 448,444 and $ 204,011 , respectively.

Unrecognized stock-based compensation

expense was $ 1,342,964 and average expected recognition period was 1.6 years as of June 30, 2023.

For the years ended June 30, 2024 and 2023, stock-based

compensation expenses for options granted were $ 732,167 and $ 448,444 , respectively.

Unrecognized stock-based compensation expense was

$ 857,026 and average expected recognition period was 1.1 years as of June 30, 2024.

The following is a schedule summarizing stock

option activities for the periods presented:

Number of Options

Exercise Price

3 unchanged sentences

Exercisable at June 30, 2024

(1) Represents the excess of the fair value on the last day of period (which was $ 2.90 as of June 30, 2023) over the exercise price, multiplied by the number of options.

Number of Options

Weighted Average

(1) Represents the excess of the fair value on the last day of

period (which was $ 3.59 as of June 30, 2024) over the exercise price, multiplied by the number of options.

Exercise Price

Aggregate Intrinsic

Outstanding at July 1, 2022

2 unchanged sentences

Exercisable at June 30, 2023

(1) Represents the excess of the fair value on the last day of

period (which was $ 2.90 as of June 30, 2023) over the exercise price, multiplied by the number of options.

Note 5 – Facility Operating Lease

On April 1, 2021, the Company commenced a 5 -year

operating lease for a facility in Goleta, California with total lease payments of $781,813.

The Company determined the lease constitutes

a Right of Use (ROU) asset and has recorded the present value of the lease payments as an asset and liability per ASC 842.

the asset will be amortized on a straight-line basis over the 60-month period and amortization began at the start of the lease.

Additionally,

operating lease for a facility in Santa Barbara, California with total lease payments of $ 781,813 .

The Company determined the lease

constitutes a Right of Use (ROU) asset and has recorded the present value of the lease payments as an asset and liability per ASC 842.

The lease agreement waived the first three months of rent with payments commencing July 1, 2021.

At the commencement of the lease, the net

present value of the lease payments was $ 767,553 .

At the commencement of the lease, the

net present value of the lease payments was $ 767,553 .

In addition to these lease payments, the Company is also responsible for its shares

3 unchanged sentences

The lease agreement also provides for the option to extend the lease for two additional sixty-month periods.

lease payments for these additional periods are not included in the lease liability amount presented on the balance sheet.

July 1, 2023, one of the two options to extend was considered reasonably certain of exercise and the Company remeasured the ROU asset

and lease liability.

The Company recorded the net present value of $ 1,189,606 for both the ROU asset and lease liability on July 1, 2023.

The following table presents maturities of operating

lease liabilities on an undiscounted basis as of June 30, 2024:

For the years ending June 30,

Less imputed interest

Total operating lease liability

current portion

Lease liability, long term

Total lease liability

lease liability, current portion

Lease liability, long term portion

The lease term and the discount rate for the lease

at June 30, 2024 is 6.8 years and 4.00 %, respectively.

The total lease payments were $ 129,437 and $ 157,141 for the years ended June 30,

The total lease expenses were $ 167,097 and $ 129,437 for the years ended June 30,

2024 and 2023, respectively.

1 unchanged sentence

years ended June 30, 2024 and 2023, respectively.

Beginning April 1, 2021, the Company began

subleasing a portion of their facility.

The sub-lease provided for base monthly rent of $13,013 through May 31, 2021 and $8,400 starting

June 1, 2021 plus common area operating and utility costs.

The sublease was amended again on May 17, 2022 to sublease a smaller portion

of the property at a base rental rate of $5,200 per month effective June 1, 2022.

Of rental income, including reimbursement of common

area operating and utility costs, the Company recognized $ 128,921 and $ 279,727 for the years ended June 30, 2023 and 2022, respectively.

In April 1, 2021, the Company subleased a

portion of their facility.

The sub-lease provided for base monthly rent of $ 13,013 through May 31, 2021 and $ 8,400 starting June 1,

2021 plus common area operating and utility costs.

The sublease was amended again on May 17, 2022 to sublease a smaller portion of the

property at a base rental rate of $ 5,200 per month effective June 1, 2022.

The Company recognized sub-lease income of $ 128,921 , including

reimbursement of common area operating and utility costs, for the year ended June 30, 2023.

The sub-lease ended in March 2023.

4 unchanged sentences

of 5 years and an exercise price of $ 3.00 .

The following

warrants to purchase common stock were outstanding as of June 30, 2023:

Number of Shares

Exercise Price

Expiration Date

The following warrants to purchase common stock

were outstanding as of June 30, 2024:

Number of Shares Exercise Price Expiration Date

286,672 $ 2.00 June 22, 2026

37,433 2.00 June 28, 2026

11,500 2.00 July 1, 2026

29,067 3.00 December 22, 2027

1 unchanged sentence

6,720 3.00 March 31, 2028

Note 7 – 401(k) Plan

has a 401(k) savings plan (the 401(k) plan).

The 401(k) plan is a defined contribution plan intended to qualify under Section 401(k) of

the Internal Revenue Code.

All full-time employees of the Company are eligible to participate pursuant to the terms of the 401(k) plan.

The Company made c ontributions of $ 50,034 and $ 15,484 for the years ended June 30, 2023 and 2022, respectively.

8 – Subsequent Events

On September 10, 2023, the Company exercised its

option to purchase 649,750 unvested restricted shares of Lee McCarthy for a total consideration of $ 4,001 , the initial purchase price

of these shares.

44,933 3.00 May 10, 2028

Note 7 – Concentration of Credit Risk and Significant Customers

The Company manages its credit risk associated

with exposure to its direct customers on outstanding accounts receivable through the application of credit approvals and other monitoring

The Company closely monitors the aging of accounts receivable from its direct customers.

Significant customers are those that

represent 10% or more of revenue or accounts receivable.

Total revenues, by percentage, from individual

customers representing 10% or more of total revenues in the respective periods were as follows:

Year Ended June 30,

* Less than 10% of total

Accounts receivable, by percentage, from individual

customers representing 10% or more of accounts receivable are set forth in the following table:

As of June 30,

* Less than 10% of total

Customer A, B, C and D are government agencies.

Note 8 – Subsequent Event

The Company has evaluated subsequent events through

the issuance of these financial statements, and determined that there have been no events that have occurred that would require adjustments

to our disclosures in the consolidated financial statements except for the following:

Note Purchase Agreements

On August 5, 2024, the Company entered into note

purchase agreements (the “NPA”) for an aggregate financing of $ 1.8 million with five accredited investors (“Investors”).

At the first closing under the NPA, which occurred on August 5, 2024, the Company issued to the investor’s convertible promissory

notes in the aggregate principal amount of $ 1,800,000 (the “Notes”) to purchase shares of the Company’s common stock,

par value $ 0.0001 per share.

At a second closing under the NPA, which occurred on August 27, 2024, the Company issued convertible promissory

notes to five additional accredited Investors in the aggregate principal amount of $ 1,345,000 for aggregate proceeds of $ 3,145,000 .

Company may hold additional closings, but there is no guarantee as to how much additional proceeds, if any, it will receive.

September 6, 2024, the Company won $ 11.717 million DARPA contract for nano-scale semiconductors to develop heterogeneous integration technology

compatible with leading edge and future advanced-node semiconductors.

Technology applications include AI, mobile devices and 5G/6G.

DARPA contract to Aeluma is structured with $ 5.974 million provided over 18 months, and the $ 5.743 million balance provided over the following

18 months as Aeluma meets certain milestones.

Teledyne Scientific Company, the Central Research Laboratory of Teledyne ,

is a proposed subcontractor to assist with defining target materials and with developing strategies for demonstrating program metrics.

The University of California Santa Barbara is also a proposed subcontractor to support the implementation of test devices.

Changes in and Disagreements with Accountants on Accounting

1 unchanged sentence

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 8. Financial Statements and Supplementary Data