What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2025-02-11 · 255 added, 187 removed, 16 unchanged (97% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

otherwise stated or the context otherwise indicates, references to “Aeluma,” the “Company,” “we,”

“our,” “us,” or similar terms refer to Aeluma, Inc.

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

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.

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

develops novel optoelectronic and electronic devices for sensing, communication, and computing applications.

Aeluma has pioneered a technique

to produce semiconductor materials and chips using high-performance compound semiconductors on large diameter substrates that are commonly

used to manufacture mass market microelectronics.

This enables cost effective manufacturing of high-performance photodetectors and photodetector

arrays for imaging applications in mobile devices, as well as other applications.

Aeluma’s technology has the potential to impact

a broad range of market verticals.

Aeluma is based in Goleta, California, where the Company operates in a 9,000 sq.

facility with

a state-of-the-art R&D/manufacturing cleanroom and access to world-class rapid prototyping capabilities.

The facility houses unique

equipment for scalable manufacturing.

Aeluma also partners with production-scale fabrication foundries and packaging companies.

maintains extensive patent protection and trade secrets that relate to its materials, manufacturing technology and applications.

is a transformative semiconductor company specializing in high-performance technology that scales.

Applications include mobile, automotive,

AI, defense & aerospace, communication, AR/VR, high-performance commuting, and quantum computing.

Aeluma aims to break out of traditional

manufacturing to expand the reach of its technology into mass markets.

The demand for higher performance semiconductors in consumer markets

is increasing (https://www.marketsandmarkets.com/Market-Reports/shortwave-ir-market-52975079.html).

Aeluma’s disruptive technology

is scalable, cost effective, while not sacrificing performance.

Additionally,

Aeluma’s technology may be used to manufacture other electronic and optoelectronic devices including lasers, transistors, and solar

Government Contract

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

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

provided over the following 18 months as Aeluma meets certain milestones.

Teledyne Scientific Company, the Central Research Laboratory

of Teledyne, is a proposed subcontractor to assist with defining target materials and with developing strategies for demonstrating

program metrics.

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

August 5, 2024 and August 27, 2024, we issued convertible promissory notes in the aggregate principal amount of $3,145,000 to 10 accredited

investors, pursuant to a private note financing.

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.

You should not place undue reliance on

forward-looking statements as predictive of future results.

Aeluma develops novel optoelectronic and electronic

devices for sensing, communication, and computing applications.

Aeluma has pioneered a technique to produce semiconductor materials and

chips using high-performance compound semiconductors on large diameter substrates that are commonly used to manufacture mass-market microelectronics.

This enables cost-effective manufacturing of high-performance photodetectors and photodetector arrays for imaging applications in mobile

devices, as well as other applications.

Aeluma’s technology has the potential to impact a broad range of market verticals.

is based in Goleta, California, where we operate in a 9,000 sq.

facility with a state-of-the-art R&D/manufacturing cleanroom and

access to world-class rapid prototyping capabilities.

The facility houses unique equipment for scalable manufacturing.

Aeluma also partners

with production-scale fabrication foundries and packaging companies.

Aeluma maintains extensive patent protection and trade secrets that

relate to its materials, manufacturing technology, and applications.

Aeluma is a transformative semiconductor company

specializing in high-performance technology that scales.

Applications include mobile, automotive, AI, defense & aerospace, communication,

AR/VR, high-performance commuting, and quantum computing.

Aeluma aims to break out of traditional manufacturing to expand the reach of

its technology into mass markets.

The demand for higher-performance semiconductors in consumer markets is increasing (https://www.marketsandmarkets.com/Market-Reports/shortwave-ir-market-52975079.html).

Aeluma’s disruptive technology is scalable, cost effective, while not sacrificing performance.

Additionally, Aeluma’s technology may be

used to manufacture other electronic and optoelectronic devices including lasers, transistors, and solar cells.

Recent Government Contracts

On September 6, 2024, we won an $11.717 million

DARPA contract for nano-scale semiconductors to develop heterogeneous integration technology compatible with leading edge and future advanced-node

semiconductors.

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

This DARPA contract to Aeluma is structured with $5.974 million

provided over 18 months, and the $5.743 million balance provided over the following 18 months as Aeluma meets certain milestones.

Teledyne Scientific Company, the Central Research Laboratory of Teledyne, is a proposed subcontractor to assist with defining target

materials and with developing strategies for demonstrating program metrics.

The University of California Santa Barbara is also a proposed

subcontractor to support the implementation of test devices.

April 24, 2025, we received a contract from the U.S.

Department of Energy to develop commercially viable, low-cost shortwave infrared

(SWIR) photodetectors.

The award will accelerate commercialization of Aeluma’s wafer-scale platform for high-sensitivity, energy-efficient

photodetector sensors applicable across critical growth sectors.

Private Placements and Conversion of Notes

Between August 5, 2024 and August 27, 2024, we

issued convertible promissory notes in the aggregate principal amount of $3,145,000 to 10 accredited investors, pursuant to a private

note financing.

The Notes mature in June 2026 and do not carry any interest.

The Notes are convertible

into shares of the Company’s common stock par value $0.0001 per share (the “Common Stock”) upon the occurrence of certain

events, (i.e., qualified financing resulting in at least $5,000,000 to the Company, if the Common Stock is uplisted to a national securities

exchange or if neither of those such events occur prior to the maturity date, (together with Sale of the Company (as hereinafter defined),

a “Conversion Event”)).

In the event the Company does not complete qualified financing or uplist at or before the maturity

date, the outstanding balance of the Notes shall automatically convert without any further action by the Holder into shares of the Company’s

common stock equal to eighty-five percent (85%) to the VWAP of the Common Stock on the OTC Markets for the five trading days immediately

prior to maturity date.

The Note also provides that if there is a Sale of the Company, as defined in the Note, the Holder may elect to

receive a cash payment equal to the aggregate amount of principal then outstanding under such Holder’s Note or convert the Note

into shares of Common Stock equal to 85% of the VWAP of the Common Stock on the OTC Markets for the five trading days immediately prior

to the Sale of the Company.

Although the conversion price is dependent upon the type of Conversion Event that occurs, the Note does carry

a ceiling and floor price:

the applicable conversion price will not be lower than 85% of the 5-day VWAP on the applicable Closing Date

(the “Floor Price”) nor will the applicable conversion price be higher than $3.50 per share (the “Ceiling Price”);

the Floor Price and Ceiling Price shall automatically adjust in the event of a stock split or consolidation by the Company.

Price for the investors who participated in this initial closing is equal to $2.68 per share.

Since the Floor Price is tied to the Closing

Date, the Floor Price may be different for investors that are part of a different closing, should the Company hold additional closings.

The Investors were granted piggyback registration rights for the shares of Common Stock underlying the Note.

Note Purchase Agreement (“NPA”) also contains customary representation and warranties of the Company and the Investors, indemnification

obligations of the Company, termination provisions, and other obligations and rights of the parties.

foregoing description of the NPA and the Note is qualified by reference to the full text of the forms of NPA and Note, which are filed

as Exhibits hereto and incorporated herein by reference.

of Operations

technology is based on heterogeneous integration of compound semiconductor materials on large-diameter substrates such as silicon.

heterogeneous integration enables the subsequent device fabrication and manufacturing in large-scale manufacturing environments that

are suited to mass markets.

will continue to develop our technology that includes novel materials and devices based on our core intellectual property.

focus is to manufacture high-performance semiconductor technologies that scale for mass markets.

Aeluma operates an R&D/manufacturing

facilities at its headquarters in Goleta, California, and has developed relationships with volume fabrication foundries and packaging

We will continue to mature our manufacturing processes to further our commercialization traction.

We have generated revenue

through various customer and government contracts, including small-volume orders, engineering sample evaluations, non-recurring engineering

(NRE) development efforts, and R&D projects.

We will continue to perform on these various efforts, expand our business development

and marketing efforts, further engage with our manufacturing partners, and continue our efforts toward volume production and commercialization.

We expect to rely on such external capabilities to scale our production capacity in support of high-volume markets.

Operating History

cannot guarantee that the proceeds from the Offering will be sufficient to carry out all of our business plans.

Our business is subject

to risks inherent in growing an enterprise, including limited capital resources, risks inherent in the research and development process

and possible rejection of our products in development.

financing is not available on satisfactory terms, we may be unable to carry out all of our operations.

Equity financing will result in

dilution to existing stockholders.

of Results of Operations

revenue currently consists of commercial product sales and government contracts.

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.

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.

expense research and development expenses as incurred.

and administrative expenses consist primarily of compensation and related costs for personnel, including stock-based compensation and

employee benefits.

In addition, general and administrative expenses include third-party consulting, legal, insurance, audit and

accounting services, and office lease and utility expenses.

Income (Expense)

income consists primarily of interest earned in interest-bearing savings account in bank.

of discount on convertible notes represents the non-cash interest expense associated with the amortization of convertible notes issued

to our debtholders.

in the fair value of derivative liabilities reflect valuation changes in the derivatives held by the Company.

tax expense consists primarily of income taxes in certain state jurisdictions in which we conduct business.

of Operations

results of operations for the six months ended December 31, 2024, as compared to the same period of 2023, were as follows:

Six Months Ended December 31,

The Notes are convertible into shares of the Company’s

common stock par value $0.0001 per share (the “Common Stock”) upon the occurrence of certain events, (i.e., qualified financing

resulting in at least $5,000,000 to the Company, if the Common Stock is uplisted to a national securities exchange or if neither of those

such events occur prior to the maturity date, (together with Sale of the Company (as hereinafter defined), a “Conversion Event”)).

In the event the Company does not complete qualified financing or uplist at or before the maturity date, the outstanding balance of the

Notes shall automatically convert without any further action by the Holder into shares of the Company’s common stock equal to eighty-five

percent (85%) to the VWAP of the Common Stock on the OTC Markets for the five trading days immediately prior to maturity date.

also provides that if there is a Sale of the Company, as defined in the Note, the Holder may elect to receive a cash payment equal to

the aggregate amount of principal then outstanding under such Holder’s Note or convert the Note into shares of Common Stock equal

to 85% of the VWAP of the Common Stock on the OTC Markets for the five trading days immediately prior to the Sale of the Company.

the conversion price is dependent upon the type of Conversion Event that occurs, the Note does carry a ceiling and floor price:

the applicable

conversion price will not be lower than 85% of the 5-day VWAP on the applicable Closing Date (the “Floor Price”) nor will

the applicable conversion price be higher than $3.50 per share (the “Ceiling Price”);

the Floor Price and Ceiling Price shall

automatically adjust in the event of a stock split or consolidation by the Company.

The Floor Price for the investors who participated

in this initial closing is equal to $2.68 per share.

Since the Floor Price is tied to the Closing Date, the Floor Price may be different

for investors that are part of a different closing, should the Company hold additional closings.

The Investors were granted piggyback

registration rights for the shares of Common Stock underlying the Note.

The Note Purchase Agreement (“NPA”)

also contains customary representation and warranties of the Company and the Investors, indemnification obligations of the Company, termination

provisions, and other obligations and rights of the parties.

The foregoing description of the NPA and the Note

is qualified by reference to the full text of the forms of NPA and Note, which are filed as Exhibits hereto and incorporated herein by

On March 25, 2025, we determined that a Conversion

Event had occurred pursuant to the terms of the Notes.

As a result, certain holders elected to convert their Notes at the applicable Ceiling

Price of $3.50 per share, resulting in the issuance of an aggregate of 898,573 shares of Common Stock in exchange for $3,145,000 in outstanding

principal under the Notes.

Following the conversion, we have no further obligations under the converted Notes.

The shares issued upon

conversion are subject to piggyback registration rights previously granted to the investors.

See Public Offering of Common Stock in Note

3 – Convertible Notes

Public Offering of Common Stock

On March 26, 2025, we entered into an Underwriting

Agreement (“UA”) with Craig-Hallum Capital Group LLC in connection with a public offering of 2,285,714 shares of its common

stock at a price of $5.25 per share.

We also granted the Underwriter a 30-day option to purchase up to an additional 342,857 shares to

cover over-allotments, which was exercised in full on March 27, 2025.

The offering closed on March 28, 2025.

The offering was conducted pursuant to our registration

statements on Form S-1 (File No.

333-285469), declared effective by the SEC on March 25, 2025, and on Form S-1MEF filed under Rule 462(b),

effective March 26, 2025.

Under the terms of the UA, we provided a 7.0%

underwriting discount per share and issued to the Underwriter warrants to purchase up to 5.0% of the total shares sold in the offering

(including the over-allotment shares), with an exercise price equal to 115% of the public offering price.

Total gross proceeds from the offering, including

the over-allotment option, were $13,799,998.

Net proceeds, after underwriting discounts and offering expenses, were $12,587,439.

to use the proceeds for business development, scaling manufacturing operations, and general corporate purposes.

In connection with the offering, we, as well as

our directors and officers, agreed to a 90-day lock-up period restricting sales or transfers of Company securities, subject to customary

The Underwriter has the discretion to release these restrictions at any time.

Executive Officer Announcements

As of March 18, 2025,

James Seo agreed to serve as Aeluma’s interim Chief Financial Officer/Principal Accounting Officer until the Company hires a

full-time CFO.

Seo has been serving as the Company’s Controller since May 2023.

Plan of Operations

Our technology is based on heterogeneous integration

of compound semiconductor materials on large-diameter substrates such as silicon.

This heterogeneous integration enables the subsequent

device fabrication and manufacturing in large-scale manufacturing environments that are suited to mass markets.

We will continue to develop our technology that

includes novel materials and devices based on our core intellectual property.

Our primary focus is to manufacture high-performance semiconductor

technologies that scale for mass markets.

Aeluma operates R&D/manufacturing facilities at its headquarters in Goleta, California,

and has developed relationships with volume fabrication foundries and packaging partners.

We will continue to mature our manufacturing

processes to further our commercialization traction.

We have generated revenue through various customer and government contracts, including

small-volume orders, engineering sample evaluations, non-recurring engineering (NRE) development efforts, and R&D projects.

continue to perform on these various efforts, expand our business development and marketing efforts, further engage with our manufacturing

partners, and continue our efforts toward volume production and commercialization.

We expect to rely on such external capabilities to

scale our production capacity in support of high-volume markets.

Limited Operating History

We have a limited operating history, and our future

success is subject to numerous uncertainties and risks inherent in the development of a new business.

Although we successfully completed

our public offering on March 26, 2025, raising gross proceeds of $13,800,000, there can be no assurance that these funds will be sufficient

to carry out all aspects of our business plan.

Following the offering, management has assessed

our financial position and operating plan and determined that the previously reported substantial doubt about our ability to continue

as a going concern has been alleviated.

The proceeds from the offering have provided near-term capital to support our operations and ongoing

development efforts.

However, we continue to face risks typical of early-stage companies, including limited capital resources, operational

and financial challenges, and uncertainty in product development.

Components of Results of Operations

Our revenue currently consists of commercial product

sales and government contracts.

Operating Expenses

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

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

General and administrative expenses consist primarily

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

In addition, general and

administrative expenses include third-party consulting, legal, insurance, audit and accounting services, and office lease and utility

Other Income (Expense)

Interest income consists primarily of interest

earned in interest-bearing savings accounts and certificates of deposit placed in a bank.

Amortization of discount on convertible notes

represents the non-cash interest expense associated with the amortization of convertible notes issued to our debtholders.

Changes in the fair value of derivative liabilities

reflect valuation changes in the derivatives held by us.

Income Tax Expense

Income tax expense consists primarily of income taxes in certain state

jurisdictions in which we conduct business.

Results of Operations

Our results of operations for the nine months

ended March 31, 2025, as compared to the same period of 2024, were as follows:

Nine Months Ended March 31,

Operating expenses

Other income (expense)

Loss before income tax expense

2 unchanged sentences

$ (3,573,480 )

$ (1,013,614 )

Revenue increased $1,797,862 to $2,093,254, of which $1,892,261 was from government contracts and $200,993 was from commercial product

and service contract, for the six months ended December 31, 2024 from $295,392 of which $262,992 was from government contracts and $32,400

was from commercial product and service contract, for the same period in 2023.

Operating expenses decreased $471,866, or 16.2%, to $2,435,036 for the six months ended December 31, 2024 from $2,906,902

for the same period in 2023, due primarily to decreases in consulting and professional expenses and less purchases for R&D activities.

income (expense):

Other income (expense) consists of amortization of discount on convertible notes of ($427,819), changes in fair

value of derivative liabilities of ($2,855,045) and interest income of $203 for the six months ended December 31, 2024.

tax expense :

We did not record income tax expense for either of the six months ended December 31, 2024 and 2023.

Resources and Liquidity

financial statements have been presented on the basis that are a going concern, which contemplates the realization of assets and satisfaction

of liabilities in the normal course of business.

As presented in the financial statements, we incurred a net loss of $3,624,443 and $2,610,829

for the six months ended December 31, 2024 and 2023, respectively, and losses are expected to continue in the near term.

The accumulated

deficit was $17,248,804 at December 31, 2024.

We have been funding our operations through the sale of convertible notes and common stock

in private placement transactions.

anticipates that significant additional expenditures will be necessary to develop and expand our business before significant positive

operating cash flows can be achieved.

Our ability to continue as a going concern is dependent upon our ability to raise additional capital

and to ultimately achieve sustainable revenues and profitable operations.

At December 31, 2024, we had $3,063,059 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.

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

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

(b) controlling overhead and expenses;

material sales or research contracts;

and (d) pursuing additional sales and contracts.

There can be no assurance that we can successfully

accomplish these steps and it is uncertain that we will achieve a profitable level of operations and obtain additional financing.

can be no assurance that any additional financing will be available to us on satisfactory terms and conditions, if at all.

date of this Report, we have not entered into any formal agreements regarding the above.

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.

had working capital of $4,041,363 and $766,160 at December 31, 2024 and June 30, 2024, respectively.

Current assets increased $3,137,323

to $4,530,169 at December 31, 2024 from $1,392,846 at December 31, 2024, primarily due to a $1,771,987 increase in cash and a $1,264,628

increase in accounts receivable.

Current liabilities decreased $137,880 to $488,806 at December 31, 2024 from $626,686 at June 30, 2024,

due primarily to decrease in accounts payable.

following table shows a summary of our cash flows for the periods presented:

Six Months Ended December 31,

Revenue increased $2,708,934 to

$3,348,220, of which $3,147,225 was derived from government contracts and $200,995 from commercial product and service contract, for the

nine months ended March 31, 2025 compared to $639,286, of which $606,886 was derived from government contracts and $32,400 from commercial

product and service contracts, for the same period in 2024.

Operating expenses :

Operating expenses

increased $307,908 or 7.3%, to $4,521,472 for the nine months ended March 31, 2025, compared to $4,213,564 for the same period in 2024.

The increase was primarily driven by higher salaries and employee benefits, partially offset by a reduction in research and development

Other income (expense):

Other income (expense)

consists of amortization of discount on convertible notes of ($715,117), changes in fair value of derivative liabilities of ($277,942),

and interest income of $2,761 for the nine months ended March 31, 2025.

Income tax expense :

No income tax expense was recorded for the

nine months ended March 31, 2025 and 2024.

Liquidity and Capital Resources

As of March 31, 2025, we had cash, cash equivalents,

and a certificate of deposit totaling $15,865,659, compared to $1,291,072 as of June 30, 2024.

The increase in cash was primarily attributable

to the net proceeds from our public offering completed on March 26, 2025, which generated gross proceeds of $13,799,998, offset by underwriting

discounts and offering expenses totaling $1,212,559.

Prior to the offering, our operations were primarily

financed through the issuance of convertible notes and sales of common stock in private placement transactions.

As previously disclosed,

we had expressed substantial doubt about our ability to continue as a going concern due to recurring losses and negative operating cash

With the successful completion of the offering, we believe that substantial doubt about our ability to continue as a going concern

has been alleviated for at least the next twelve months.

We intend to use the net proceeds from the offering

to support operational growth, invest in product development, and fund working capital and general corporate purposes.

Based on our current

operating plan, we believe that our existing cash, cash equivalents, and certificate of deposit, combined with projected revenues and

cost management strategies, will be sufficient to meet our working capital and capital expenditure requirements for at least the next

twelve months.

We will continue to assess our capital requirements

and may pursue additional financing opportunities to support long-term growth initiatives or respond to changes in market conditions.

As of March 31, 2025, we had working capital of

$16,700,152, compared to $766,160 as of June 30, 2024.

The increase was primarily driven by a $15,833,149 increase in current assets,

which rose to $17,225,995 from $1,392,846 over the same period, largely due to a $14,574,587 increase in cash, cash equivalents, and a

certificate of deposit.

Current liabilities decreased to $525,843 as of March 31, 2025, from $626,686 as of June 30, 2024, primarily reflecting

a reduction in accounts payable.

The following table shows a summary of our cash

flows for the periods presented:

Nine Months Ended March 31,

Net cash provided by (used in)

6 unchanged sentences

$ (3,197,125 )

cash used in our operating activities were $1,332,216 and $2,480,345 for the six months ended December 31, 2024 and 2023, respectively,

due primarily to net losses of $3,624,443 and $2,610,829 for the six months ended December 31, 2024 and 2023, respectively.

cash used in our investing activities was $40,797 and $164,290 for the six months ended December 31, 2024 and 2023, respectively.

activities include purchase of equipment.

cash provided by our financing activities was $3,145,000 for the six months ended December 31, 2024 and net cash used in our financing

activities was $4,001 for the same period of 2023.

We received $3,145,000 from issuing convertible notes for the six months ended December

31, 2024 and paid $4,001 to purchase unvested restricted shares for the same period of 2023.

Accounting Policies

the three and six months ended December 31, 2024, there were no significant changes in our critical accounting policies.

Quantitative and Qualitative Disclosures about Market Risk

Net cash used in our operating activities were

$1,082,677 and $2,876,190 for the nine months ended March 31, 2025 and 2024, respectively.

For the nine months ended March 31, 2025, the

net cash used in operating activities primarily resulted from a net loss of $2,163,550 and a decrease in accounts receivable of $1,083,413.

These amounts were partially offset by non-cash adjustments including stock-based compensation expense of $1,148,986, amortization of

discount on convertible notes of $715,117, depreciation and amortization expense of $307,150, and a change in fair value of derivative

liabilities of $277,942.

For the nine months ended March 31, 2024, the net cash used in operating activities was primarily attributable

to a net loss of $3,573,480, partially offset by non-cash stock-based compensation expense of $568,340.

Net cash used in our investing activities totaled

$85,175 and $316,934 for the nine months ended March 31, 2025 and 2024, respectively.

These investing activities primarily consisted of

purchases of equipment.

Net cash provided by our financing activities

was $15,742,439 for the nine months ended March 31, 2025, compared to net cash used in our financing activities of $4,001 for the same

period in 2024.

We received $3,145,000 from the issuance of convertible notes, $12,587,439 from a public offering, and $10,000 from the

exercise of stock options for the nine months ended March 31, 2025, and also used $4,001 to purchase unvested restricted shares for

the same period of 2024.

Critical Accounting Policies

During the three and nine months ended March 31,

2025, there were no significant changes in our critical accounting policies.

Quantitative and

Qualitative Disclosures about Market Risk

Not applicable.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis