What changed in this filing

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Item 1. Business

2025-09-09 compared with 2024-09-27 · 304 added, 187 removed, 38 unchanged (93% of the section changed)

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 photodetectors and photodetector array circuits for imaging applications in mobile devices,

as well as other technologies.

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.

Because we will leverage

compound semiconductor materials, our devices may operate at longer wavelengths than traditional silicon-based image sensors, 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.

Additionally, Aeluma’s

technology may be used to manufacture other electronic and optoelectronic devices in the future including lasers, transistors, and solar

Aeluma has acquired key

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

year ended June 30, 2024, we were awarded several contracts, totaling $1,323,237 ,

some of which is from the U.S.

Navy, the Office of the Secretary of Defense, and the Department of Energy, for providing services and

for delivering materials.

The awards are firm fixed price contracts that shall be paid upon completion of certain milestones, and may

include deliveries of samples or materials.

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 photodetector array circuits for image sensors and other optoelectronic devices.

Initial efforts aim to penetrate the

3D imaging and sensing (mobile and consumer, defense and aerospace, industrial, medical, auto), LiDAR (robotic vehicles, autonomous driving

(AD), advanced driver assistance systems (ADAS), topography, wind, industrial), and communications (telecommunications, data center communication,

artificial intelligence (AI) communications, and quantum processing and communications) markets.

We develop high-performance semiconductors for sensing, communication,

and computing applications.

Aeluma has pioneered a technique to manufacture devices using compound semiconductor materials 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, considered one of the most important

technology hubs in the world that some claim is the next Silicon Valley.

We operate in a 9,000 sq.

facility with a state-of-the-art

research and development (R&D)/manufacturing cleanroom and access to world-class rapid prototyping capabilities.

The facility houses

unique equipment for scalable manufacturing.

We also partner with production-scale fabrication foundries and packaging companies.

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

Recent Events

Shelf Registration Statement

On July 31 st , 2025, we filed a

registration statement on Form S-3 with the SEC, using a “shelf” registration process.

Under this shelf registration

process, we may sell any combination of the securities described in the related prospectus in one of more offerings up to a total

dollar amount of proceeds of $100,000,000.

The prospectus describes the general manner in which our securities may be offered by the

Each time we sell securities under the prospectus, we will provide a prospectus supplement that will contain specific

information about the terms of that offering.

The prospectus supplement may also add, update, or change information contained in

this prospectus or in documents incorporated by reference in this prospectus.

The prospectus supplement that contains specific

information about the terms of the securities being offered may also include a discussion of certain U.S.

Federal income tax

consequences and any risk factors or other special considerations applicable to those securities.

To the extent that any statement

that we make in a prospectus supplement is inconsistent with statements made in this prospectus or in documents incorporated by

reference in this prospectus, you should rely on the information in the prospectus supplement.

The “shelf” registration

statement was originally filed on July 31, 2025, amended on August 6, 2025 and declared effective on August 8, 2025 (File No.

3330289135) (the “ Shelf S3 ”).

Recent Government Contracts

In August 2024, we received a contract by NASA

to develop quantum dot photonic integrated circuits (PICs) on silicon.

This advanced technology targets next-generation space and aerospace

applications, enabling capabilities such as free-space laser communication, autonomous navigation, and precision sensing.

In September 2024, we received an $11.7 million contract with

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

semiconductors.

Technology applications include artificial intelligence (“AI”), mobile devices, and 5G/6G wireless networking.

This DARPA contract to Aeluma is structured with $6.0 million expected to be invoiced over the first 18 months and the remaining

$5.7 million invoiced over the following 18 months, contingent on Aeluma meeting certain milestones.

In April 2025, we received a contract with the

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.

In June 2025, we received a contract with the

Navy that could accelerate development of high-speed photodetectors for government and commercial applications.

The new contract

is for up to $1.3 million in funding, includes a major global interconnect manufacturer as a proposed subcontractor, and involves support

from a top-tier government prime contractor.

In June 2025, we received a contract with the

Navy that could accelerate development and commercialization for next-generation quantum computing and sensing systems.

The new contract

will support Aeluma’s low size, weight, and power imaging sensors for next-generation submarine systems.

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 $3.1 million to 10 accredited investors, pursuant to a private note financing.

The Notes were

to mature in June 2026 and did not carry any interest.

The Notes were 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 $5.0 million 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”)).

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

would 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 provided that if there was 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 was dependent upon the type of Conversion Event that occurs, the Note carried a ceiling and floor price:

the applicable

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

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 was equal to $2.68 per share.

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

for investors who 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, all 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 $3.1 million in

outstanding principal under the Notes.

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

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 (the “Offering”).

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 $13.8 million.

Net proceeds, after underwriting discounts and Offering expenses, were $12.6 million.

intend 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.

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.

Our technology has the potential to impact across mobile, automotive, AI, defense & aerospace, communication,

augmented reality (“AR”), virtual reality (“VR”), high-performance computing (“HPC”) and quantum computing

applications.

Aeluma operates an R&D/manufacturing facility 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

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.

Our Technology

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.

There are two primary

classes of image sensors for the near infrared and shortwave infrared currently on the market:

low-cost silicon-based sensors and high-performance

compound semiconductor (ex.

indium gallium arsenide or InGaAs) sensors.

The major suppliers of silicon CMOS image sensors include Sony,

Samsung, Omnivision, Onsemi, ST Microelectronics, Panasonic, Canon, SK Hynix, and others (Source:

Yole Development, www.yole.fr).

technologies that can be manufactured on silicon include germanium and colloidal quantum dots.

The major suppliers of InGaAs sensors include

Hamamatsu, Sumitomo, Teledyne/FLIR, Excelitas, and others (Source:

Markets and Markets, www.marketsandmarkets.com).

We believe that our technology

will be able to compete effectively because we are uniquely positioned to outperform silicon CMOS image sensors, germanium, and colloidal

quantum dots while achieving a cost of manufacturing that is lower than that for traditional InGaAs sensors.

Compared to silicon, InGaAs

demonstrates higher detection sensitivity and a broader wavelength absorption spectrum.

Silicon absorbs or detects light in the visible

spectral region (400-750 nm) and partially in the near infrared (NIR) spectral region (greater than 750 nm), cutting off near 940 nm.

InGaAs not only demonstrates higher absorption in the NIR, but also extends well into the shortwave infrared spectrum (900-1700 nm), cutting

off near 1700 nm, with the ability to extend to near 2500 nm.

We believe that we are

also positioned to win on price in competing with current InGaAs sensors while having the ability to realize much larger area photodetector

arrays because of our ability to manufacture on up to 12-inch silicon substrates, whereas competing InGaAs photodetectors are manufactured

on indium phosphide (InP) substrates that are typically between 2 to 4 inches in diameter.

Therefore, in addition to realizing many more

sensor chips per wafer, we have the ability to realize array sizes that are larger than what is possible with traditional InGaAs manufacturing

on InP wafers, and to leverage silicon-based wafer-scale techniques for backend processing, integration, and packaging.

Existing and potential

competitors have or could have advantages such as greater name recognition, longer operating histories, broader and deeper product portfolios,

larger customer bases, substantially greater financial and other resources, and larger scale manufacturing operations.

However, we believe

that our products will have the potential to compete because of our unique ability to manufacture high performance devices at scale and

Aeluma has customer engagements

that involve development of wafers, delivery of engineering samples for evaluation, and delivery of small volumes of chips.

performs on government-funded R&D projects.

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.

There are two primary classes of image sensors currently on the market,

low-cost silicon sensors for mass market applications, and high-performance compound semiconductor (e.g., indium gallium arsenide or “InGaAs”)

sensors deployed primarily in specialty applications.

According to Yole Development, the major suppliers of silicon complementary metal-oxide

semiconductor (“CMOS”) image sensors include Sony, Samsung, Omnivision, onsemi, STMicroelectronics, Panasonic, Canon, SK Hynix,

According to Markets and Markets, the major suppliers of InGaAs sensors include Hamamatsu, Sumitomo, Teledyne/FLIR, Excelitas,

InGaAs sensors are manufactured primarily on 2- to 4-inch substrates.

As an example, to manufacture 20 million sensor chips

of a nominal size (i.e.

chip area), approximately 425,000 3-inch wafers are required, whereas only 18,000 12-inch wafers would be required

for the same volume.

Aeluma aims to leverage larger diameter substrates up to 12-inch.

We believe that our technology will be able to

compete effectively because we are uniquely positioned to outperform silicon CMOS image sensors while achieving a cost of manufacturing

that is lower than that for traditional InGaAs sensors.

Compared to silicon, InGaAs demonstrates higher detection sensitivity and a broader

wavelength absorption spectrum.

Silicon absorbs or detects light in the visible spectral region (400-750 nm) and partially in the near

infrared (NIR) spectral region (greater than 750 nm), cutting off near 940 nm.

InGaAs not only demonstrates high absorption in the NIR,

but also extends well into the shortwave infrared (SWIR) spectrum (900-1700 nm), with the ability to extend to near 2500 nm.

speaking, 940 nm is not considered “eye-safe;” wavelengths in the SWIR are considered “eye-safe”.

We believe that we are also positioned to win

on price in competing with current InGaAs sensors while having the ability to realize much larger area photodetector arrays because of

our ability to manufacture on up to 12-inch substrates, whereas competing InGaAs photodetectors are manufactured on indium phosphide (InP)

substrates that are typically 2 to 4 inches in size.

Therefore, in addition to realizing many more sensor chips per wafer, we have the

ability to realize array sizes that are larger than what is possible with traditional InGaAs, and to leverage wafer-scale integration

and packaging that is available for 8- and 12-inch substrates.

As a result, we believe we are positioned to manufacture our products potentially

at a ten times lower cost for mass market applications and are able to scale our production to meet mass market demands at a faster rate

than incumbent technologies.

In addition to photodetectors for sensors, our

technology may apply to a broad range of photonic and electronic semiconductors.

Existing and potential competitors have or could have advantages such

as greater name recognition, longer operating histories, broader and deeper product portfolios, larger customer bases, substantially greater

financial and other resources, and larger-scale manufacturing operations.

However, we believe that our products will have the potential

to compete because of our unique ability to manufacture high-performance semiconductors at scale.

Aeluma has customer engagements that involve development

of wafers, delivery of engineering samples for evaluation, delivery of small volumes of chips, and R&D contracts.

Aeluma’s technology

is broadly applicable.

Potential markets for our technology include mobile, consumer electronics, AI, defense and aerospace, automotive,

AR/VR, and quantum computing.

Our current strategy is to pursue partnerships with system integrators, including mobile and consumer electronics

manufacturers, Tier-1 suppliers, module manufacturers, component suppliers, or semiconductor manufacturing companies.

Aeluma is pursuing

direct sales relationships and strategic partnerships.

We have active engagements with approximately 20 prospective customers.

See “ Risk Factors — Risks

Relating to Our Business, Growth Prospects and Operating Results — Our customers may require our products to undergo a lengthy

and expensive qualification process without any assurance of product sales.”

Aeluma’s technology is broadly applicable

Potential markets include automotive

LiDAR, industrial LiDAR, robotics, mobile, AR/VR, AI, communications, and defense and aerospace.

Our current strategy is to pursue partnerships

with system integrators, including mobile and consumer electronics manufacturers, LiDAR companies and Tier 1 automotive suppliers, module

manufacturers, component suppliers, or semiconductor manufacturing companies.

Aeluma is pursuing direct sales relationships and strategic

partnerships.

Potential customers include

those in the mobile market (both mobile phone manufacturers and companies that sell integrated solutions to them), LiDAR for cars and

other vehicles, robotics, AR/VR, AI, and defense and aerospace.

The CMOS image sensors

market is projected to be $30B in 2026 (Source:

Yole Development).

Manufacturers of mobile phones, tablets, and LiDAR for automotive vehicles

may be prospective customers for Aeluma.

In the mobile market, Apple arguably leads in terms of deploying advanced capabilities such as

LiDAR sensing in their devices;

and has the potential to impact across mobile and consumer electronics, AI, defense and aerospace, robotics, automotive, AR/VR, quantum

computing, and other markets.

According to a report by Yole Development dated June 2024, the CMOS image sensors market is projected to

be $28.6 billion by 2029.

In the mobile market, Apple arguably leads in terms of deploying advanced capabilities such as facial identification

and lidar sensing in their devices.

Apple does not currently use our technology in any of their products.

Apple leverages vertical cavity

surface emitting lasers (VCSEL) emitters in conjunction with single photon avalanche diode (SPAD) detectors for a LiDAR scanner in smartphones

and tablets and such technology “helps to deliver faster, more realistic augmented reality experiences and improves autofocus in

low-light scenes in photos and videos” (https://www.apple.com/newsroom/2021/05/apple-awards-an-additional-410-million-from-its-advanced-manufacturing-fund-to-ii-vi/).

Other major smartphone suppliers include Samsung, Xiaomi, OPPO, vivo, Huawei, and realme (Source:

www.counterpointresearch.com).

The automotive

LiDAR market is projected to be between $5-80B in 2030 (https://www.bloomberg.com/press-releases/2022-05-31/lidar-market-size-to-be-worth-4-71-billion-by-2030-grand-view-research-inc;

AEye Presentation, LD Micro Invitational 2022;

Estimate by Velodyne).

According to a press release

from Apple issued May 5, 2021, Apple leverages vertical cavity surface emitting laser (VCSEL) emitters in conjunction with single-photon

avalanche diode (SPAD) photodetectors for the facial identification and the lidar scanner in smartphones and tablets, and such technology

“helps to deliver faster, more realistic AR experiences and improves autofocus in low-light scenes in photos and videos”.

Other major smartphone suppliers include Samsung, Xiaomi, OPPO, vivo, Huawei, and realme according to Counterpoint Research.

to an estimate by Velodyne, the automotive lidar market is projected to be between $5 billion to $80 billion in 2030.

Statista, the AI market is projected to be $826 billion in 2030.

The silicon photonics market is projected to be $8 billion in 2030 according

to Grand View Research.

Silicon photonics is a key technology that enables optical interconnects inside data centers in support of AI

infrastructure.

The total addressable market for the quantum computing industry is projected to grow to $20 billion by 2030 according

According to Yole Group, the mobile and consumer market represented $296 billion in semiconductor revenue in 2023, and according

to DIGITIMES Asia, the global semiconductor market is projected to exceed $1 trillion in 2030.

Based on third party market research and

internal assumptions, we estimate our serviceable addressable market could reach $4.9 billion in 2030, growing at a 47% compound annual

rate from $1.0 billion in 2026.

Intellectual Property

Aeluma has filed several

patent applications with the United States Patent and Trademark Office (USPTO), and several patents have been issued.

We have filed trademarks

for the name “Aeluma” and the slogan “Sensing Reimagined” with the USPTO.

We maintain protection of trade secrets

that include “know-how” and process recipes.

Our Intellectual Property

Our strategy for the

protection of our proprietary technology is to seek worldwide patent protection with a focus on jurisdictions that represent significant

global semiconductor markets.

However, we will assess on a case-by-case basis whether it is strategically more favorable to maintain trade

secret protection for our inventions and “know-how” rather than pursue patent protection.

Generally, patents have a term of

twenty years from the earliest priority date, assuming that all maintenance fees are paid, no portion of the patent has been terminally

disclaimed, and the patent has not been invalidated.

In certain jurisdictions, and in certain circumstances, patent terms can be extended

or shortened.

Aeluma has filed several patent applications with

the United States Patent and Trademark Office (USPTO), and several patents have been issued.

To date, we have approximately 30 issued

and pending patents.

We have filed trademarks for the name “Aeluma” and the slogan “Sensing Reimagined” with the

We maintain protection of trade secrets that include “know-how” and process recipes.

Our Intellectual Property Approach

Our strategy for the protection of our proprietary

technology is to seek worldwide patent protection with a focus on jurisdictions that represent significant global semiconductor markets.

However, we will assess on a case-by-case basis whether it is strategically more favorable to maintain trade secret protection for our

inventions and “know-how” rather than pursue patent protection.

Generally, patents have a term of twenty years from the earliest

priority date, assuming that all maintenance fees are paid, no portion of the patent has been terminally disclaimed, and the patent has

not been invalidated.

In certain jurisdictions, and in certain circumstances, patent terms can be extended or shortened.

Governmental & Environmental Regulations

Our primary products

are anticipated to be compound semiconductor optoelectronic devices manufactured on silicon substrates, including InGaAs photodetectors

and photodetector arrays.

Our primary products are anticipated to be photonics and electronics

based on high-performance semiconductors.

To the extent that our products are or become subject to U.S.

export controls and regulations, these regulations

may limit the export of our products and technology, and provision of our services outside of the United States, or may require export

authorizations, including by license, a license exception, or other appropriate government authorizations and conditions, including annual

or semi-annual reporting.

Export control and economic sanctions laws may also include prohibitions on the sale or supply of certain of

our products to embargoed or sanctioned countries, regions, governments, persons, and entities.

In addition, various countries regulate

the importation of certain products, through import permitting and licensing requirements, and have enacted laws that could limit our

ability to distribute our products.

export controls and regulations,

these regulations may limit the export of our products and technology, and provision of our services outside of the United States, or

may require export authorizations, including by license, a license exception, or other appropriate government authorizations and conditions,

including annual or semi-annual reporting.

Export control and economic sanctions laws may also include prohibitions on the sale or supply

of certain of our products to embargoed or sanctioned countries, regions, governments, persons, and entities.

In addition, various countries

regulate the importation of certain products through import permitting and licensing requirements, and have enacted laws that could limit

our ability to distribute our products.

The exportation, re-exportation, and importation of our products and technology and the provision

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regions, governments, persons, or entities altogether, which could adversely affect our business, financial condition and results of operations.

We seek to comply with

all applicable statutory and administrative requirements concerning environmental quality.

Expenditures for compliance with federal state

and local environmental laws have not had, and are not expected to have, a material effect on our capital expenditures, results of operations

or competitive position.

In addition, to the extent

that our facilities and operations are or become subject to the plant and laboratory safety requirements of various environmental and

occupational safety and health laws in the U.S., we believe we are in compliance with all such laws and regulations, and to date, those

regulations have not materially restricted or impeded operations.

Further, we believe our processes to be highly efficient, generating

very low levels of waste and emissions.

For this reason, we do not view issues surrounding climate change and any currently foreseeable

related regulations as materially impacting our business and financial statements, beyond any inestimable impact on the macro-economic

We are also generally

subject to other industry and environmental regulations for electronic and semiconductor products such as the Restriction of Hazardous

Substances Directive 2002/95/EC.

We seek to comply with all applicable statutory

and administrative requirements concerning environmental quality.

Expenditures for compliance with federal state and local environmental

laws have not had, and are not expected to have, a material effect on our capital expenditures, results of operations or competitive position.

In addition, to the extent that our facilities

and operations are or become subject to the plant and laboratory safety requirements of various environmental and occupational safety

and health laws in the U.S., we believe we are in compliance with all such laws and regulations, and to date, those regulations have not

materially restricted or impeded operations.

Further, we believe our processes to be highly efficient, generating very low levels of waste

and emissions.

For this reason, we do not view issues surrounding climate change and any currently foreseeable related regulations as

materially impacting our business and financial statements, beyond any inestimable impact on the macro-economic environment.

We are also generally subject to other industry

and environmental regulations for electronic and semiconductor products such as the Restriction of Hazardous Substances Directive 2002/95/EC.

See “ Risk Factors — Risks

Relating to Our Business, Growth Prospects and Operating Results — Environmental and health and safety liabilities and expenditures

could materially adversely affect our results of operations and financial condition ” for additional information.

Manufacturing

We have established a

manufacturing and R&D facility at our headquarters in Goleta, California.

We have installed key equipment and we plan to control our

core materials manufacturing and development.

In addition to our facility, we work with a variety of vendors and are establishing relationships

with industrial foundries to build out our manufacturing supply chain.

We are now delivering

wafers and chips to some customers, primarily for R&D and sampling purposes.

Marketing activities

include direct relationships with potential customers and partners.

We are under nondisclosure agreement (NDA) with a number of current

and potential customers and partners, several of which have either visited Aeluma or hosted a visit by Aeluma representatives at their

Employees & Human

Our operations include R&D and manufacturing

capabilities for semiconductor wafer production, quick-turn chip fabrication, rapid prototyping, test and validation.

We also partner

with production-scale fabrication foundries, packaging and integration companies.

We expect to rely on such external resources and capabilities

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

We have sold chips and wafers in relatively small volumes to customers,

and have shipped samples for R&D and sampling evaluations.

However, we cannot predict whether or not customers will ultimately purchase

our product in large volumes.

See “ Risk Factors — Risks

Relating to Our Business, Growth Prospects and Operating Results — We will depend on a limited number of customers and the

loss of one or more of these customers could have a material adverse effect on our business, financial condition and results of operations.”

Marketing activities include direct relationships with potential customers

and partners.

We are under nondisclosure agreements (NDA) with several current and potential customers and partners.

In addition to posting

information on our website, we occasionally participate in conferences and trade shows to market our technology and product offerings.

Employees & Human Resources

At June 30, 2025, Aeluma had 12 full-time employees,

2 part-time employees, and consultants.

two part-time employees, and consultants.

The majority of employees work in engineering.

11 unchanged sentences

our environmental footprint and enhance our positive impact.

There is no material

litigation, arbitration, governmental proceeding or any other legal proceeding currently pending or known to be contemplated against us

or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to

any such proceeding in the 10 years preceding the date of this Report.

We may however be involved, from time to time, in claims and lawsuits

incidental to the conduct of our business in the ordinary course.

We carry insurance coverage in such amounts as we believe to be reasonable

under the circumstances and that may or may not cover any or all of our liabilities in respect of these matters.

We do not believe that

the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, cash flows or results

of operations, but cannot guarantee the same.

There is no material litigation, arbitration,

governmental proceeding, or any other legal proceeding currently pending or known to be contemplated against us or any members of our

management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding

in the 10 years preceding the date of this Report.

We may however be involved, from time to time, in claims and lawsuits incidental to

the conduct of our business in the ordinary course.

We carry insurance coverage in such amounts as we believe to be reasonable under the

circumstances and that may or may not cover any or all of our liabilities in respect of these matters.

We do not believe that the ultimate

resolution of these matters will have a material adverse impact on our consolidated financial position, cash flows or results of operations,

but cannot guarantee the same.

Corporate Information

Aeluma was incorporated

in Delaware on August 21, 2020, under the name Parc Investments, Inc.;

Aeluma was incorporated in Delaware on August

21, 2020, under the name Parc Investments, Inc.;

the name was changed to Aeluma, Inc.

in June 2021.

Our principal

executive offices are located at 27 Castilian Drive, Goleta, California 93117.

Our website is located at Aeluma, Inc.

and we make available, free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K,

Quarterly Reports on Form 10-Q, and current reports on Form 8-K, as soon as reasonably practicable after we file such reports with the

Our website and the information contained on our website is not incorporated by reference and is not a part of this Annual Report.

Risk Factors.

As a smaller reporting

company, we are not required to provide the information called for by this Item.

However, we encourage you to review the risk factors

included in our registration statement on Form S-1 (File No.

333-273149) that was filed with the SEC on July 6, 2023.

Our principal executive offices are

located at 27 Castilian Drive, Goleta, California 93117.

Our website is located at www.aeluma.com and we make available,

free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K, Quarterly Reports on

Form 10-Q, and current reports on Form 8-K, as soon as reasonably practicable after we file such reports with the SEC.

Our website and

the information contained on our website is not incorporated by reference and is not a part of this Annual Report.

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 1. Business