What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-09-09 compared with 2024-09-27 · 249 added, 187 removed, 40 unchanged (92% of the section changed)

Management’s Discussion and

Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition

and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere

in this filing.

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.

You should read the following discussion and analysis

9 unchanged sentences

forward-looking statements as predictive of future results.

We develop novel optoelectronic

devices for sensing and communications applications.

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

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

cost-effective manufacturing of high-performance 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, LiDAR,

AR/VR, facial recognition, and other applications.

Additionally, Aeluma’s technology may be used to manufacture other electronic

and optoelectronic devices in the future including lasers, transistors, and solar cells.

Private Placements

Between December 2022 and May 2023, we entered

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

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

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

Pursuant to the Offering, we paid a cash placement

agent fee of $411,015 and issued placement agent warrants to purchase up to 85,653 shares of common stock at an exercise price of $3.00

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

In connection with the Subscription Agreement,

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

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

registration statement.

The closings of the Offering were exempt from

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

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

best efforts” basis.

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

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.

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 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 reference.

Departure and Appointment of Directors and Officers

Mehta decided not run for re-election in

such decision was not the result of any disagreements with us on any matter related to the operations, policies, or practices of

The Board nominated Mr.

Craig Ensley to fill the vacancy on the Board;

on December 14, 2023, the shareholders voted to elect Mr.

to the board.

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.

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 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

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 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.

We 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.

Executive Officer Announcements

As of March 18, 2025,

James Seo agreed to serve as Aeluma’s interim Chief Financial Officer/Principal Accounting Officer until we hire a full-time

Seo has been serving as our Controller since May 2023.

As of August 4, 2025, Mr.

Christopher Stewart agreed to serve as Aeluma’s

Chief Financial Officer/Principal Accounting Officer, replacing Mr.

James Seo, our Interim CFO.

Plan of Operations

We have been developing our materials and characterization

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

of our plan of operations.

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

with manufacturing partners to carry out certain steps of our manufacturing processes externally.

We have gained access to a rapid prototyping

facility and are leveraging this access to fabricate early-stage prototypes.

In the future, we intend to implement appropriate quality

and manufacturing controls.

Some equipment was procured previously, and other equipment is being procured through purchase orders with

equipment vendors.

The primary sources of funding for equipment procurement

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

leveraged funds to continue strengthening our intellectual property including patent applications, trademarks, and development of trade

secrets and manufacturing process recipes.

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

customers and strategic partners.

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 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

If 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.

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 $13.8 million, 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

2 unchanged sentences

Operating Expenses

The cost of revenue consists of costs of materials,

as well as direct compensation and expenses incurred to provide deliverables that resulted in payment of our success fee and wafers delivered.

We anticipate that our cost of revenue will vary substantially depending on the nature of products and/or services delivered in each customer

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

compensation and employee benefits, costs associated with design, fabrication, packaging and testing of our devices, and facility lease

and utility expenses.

We expense research and development expenses as incurred.

Cost of revenue consists of costs of materials,

as well as direct compensation and other expenses incurred to provide deliverables that resulted in payment of our services performed

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.

R&D 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 R&D expenses as incurred.

General and administrative expenses consist primarily

1 unchanged sentence

In addition, general and

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

Other income, net of other expenses, consists

primarily of interest income and income generated from subleasing a portion of our research and development facility.

The sub-lease ended

in March 2023

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

2 unchanged sentences

Results of Operations

Year ended June 30, 2024 compared to the

year ended June 30, 2023

Our results of operations for the year ended June

30, 2024, as compared to the year ended June 30, 2023, were as follows:

Our results of operations for the fiscal year

ended June 30, 2025, as compared to the same period of 2024, were as follows ($ in thousands):

Year Ended June 30,

Operating expenses

Other (income) expense

Loss before income tax expense

Income tax expense

$ (4,562,295 )

$ (5,379,582 )

Revenue increased $725,215, or

375.1 %, to $918,554, of which $64,756 was from commercial product and service contracts and $853,798 was from government contracts, for

the year ended June 30, 2024 from $193,339, of which $15,000 was from commercial product and service contracts and $178,339 was from government

contracts, for the same period in 2023.

Revenue increased $3.7 million to $4.7 million, of which $4.4 million

was derived from government contracts and $266 thousand from commercial product and service contracts for the fiscal year ended June 30,

Revenue was $919 thousand, of which $854 thousand was derived from government contracts and $65 thousand from commercial product

and service contracts, for the fiscal year ended June 30, 2024.

Operating expenses :

Operating expense decreased

$221,162, or 3.9%, to $5,481,862 for the year ended June 30, 2024 from $5,703,024 for the same period in 2023, due primarily to a reduction

in consulting expenses, offset partially by increased salaries and stock-based compensation expenses.

Operating expenses

increased $1.3 million, or 24.2%, to $6.8 million for the fiscal year ended June 30, 2025, compared to $5.5 million for the same period

The increase was primarily driven by an increase in material purchases to support the delivery of our products and services associated

with revenue, as well as higher compensation and related costs, including salaries, stock-based compensation and employee benefits.

Other (income) expense:

Other (income)

Other income decreased $129,090,

99.2%, to $1,013 for the year ended June 30, 2024 from $130,103 for the same period in 2023.

The decrease was due primarily to a $128,921

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

expense consists of amortization of discount on convertible notes of ($715) thousand, changes in fair value of derivative liabilities

of ($278) thousand, and interest income of $113 thousand for the fiscal year ended June 30, 2025.

Income tax expense :

We did not record income

tax expense for either of the years ended June 30, 2024 and 2023.

Capital Resources and Liquidity

Our financial statements have been presented on

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

As presented in the financial statements, we incurred a net loss of $4,562,295 and $5,379,582 for the years ended June 30,

2024 and 2023, respectively, and losses are expected to continue in the near term.

The accumulated deficit was $13,624,361 at June 30,

We have been funding our operations through the sale of 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 June 30, 2024, we had $1,291,072 of cash and cash equivalents.

These funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through

the issuance of debt or equity securities for cash to operate our business.

No assurance can be given that any future financing will be

available or, if available, that it will be on terms that are satisfactory to us.

Even if we are able to obtain additional financing,

it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders,

in the case of equity financing.

Management has undertaken steps as part of a plan

to improve operations with the goal of sustaining our operations for the next twelve months and beyond.

These steps include (a) raising

additional capital and/or obtaining financing;

(b) controlling overhead and expenses;

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.

There can be no assurance that any additional financing

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

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

agreements regarding the above.

In the event we are unable to continue as a going

concern, the Company may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may

be subject to an involuntary petition in bankruptcy.

To date, management has not considered this alternative, nor does management view

it as a likely occurrence.

had working capital of $766,160 and $4,576,807 at June 30, 2024

and 2023, respectively.

Current assets decreased $3,941,060 to $1,392,846 at June 30, 2024 from $5,333,906 at June 30, 2023, primarily

due to a $3,780,618 decrease in cash.

Current liabilities decreased $130,413 to $626,686 at June 30, 2024 from $757,099 at June 30, 2023,

due primarily to decreases in accounts payable.

No income tax expense was recorded for the

fiscal years ended June 30, 2025 and 2024.

Liquidity and Capital Resources

As of June 30, 2025, we had cash, cash equivalents, and a certificate

of deposit totaling $15.7 million, compared to $1.3 million as of June 30, 2024.

The increase in cash was primarily attributable to the

net proceeds from the Offering, which generated gross proceeds of $13.8 million, offset by underwriting discounts and offering expenses

totaling $1.2 million.

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 June 30, 2025, we had working capital of $16.6 million, compared

to $766 thousand as of June 30, 2024.

The increase was primarily driven by a $15.9 million increase in current assets, which rose to $17.3

million from $1.4 million over the same period, largely due to a $14.4 million increase in cash, cash equivalents, and a certificate of

Current liabilities totaled $706 thousand and $627 thousand as of June 30, 2025 and 2024, respectively, and the balances primarily

consisted of accounts payable, along with accrued expenses and other short-term obligations expected to be settled within one year.

The following table shows a summary of our cash

flows for the periods presented:

flows for the periods presented ($ in thousands):

Year Ended June 30,

1 unchanged sentence

Operating activities

$ (3,454,779 )

$ (3,637,972 )

Investing activities

1 unchanged sentence

Increase (decrease) in cash

$ (3,780,618 )

$ (5,111,586 )

Net cash used in our operating activities were

$3,454,779 and $3,637,972 for the years ended June 30, 2024 and 2023, respectively, due primarily to net losses of $4,562,295 and $5,379,582

for the years ended June 30, 2024 and 2023, respectively.

Net cash used in our investing activities was

$321,838 and $672,545 for the years ended June 30, 2024 and 2023, respectively.

Investing activities include purchase of equipment and

payment for leasehold improvements.

Net cash used in our financing activities was

$4,001 for the year ended June 30, 2024 and net cash provided by our financing activities was $5,641,485 for the year ended June 30, 2023.

We paid $4,001 to purchase Lee McCarthy’s unvested restricted shares for the year ended June 30, 2024 and received $5,641,284

from Private Placements, net of $411,015 offering cost.

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.

Quantitative and Qualitative Disclosures

About Market Risk.

$1.1 million and $3.5 million for the fiscal years ended June 30, 2025 and 2024, respectively.

For the fiscal year ended June 30, 2025,

the net cash used in operating activities primarily resulted from a net loss of $3.0 million and decreases in accounts receivable of $1.0

million, and prepaid and other current assets of $609 thousand.

These amounts were partially offset by non-cash expenses including stock-based

compensation expense of $1.9 million, amortization of discount on convertible notes of $715 thousand, depreciation and amortization expense

of $416 thousand, and a change in fair value of derivative liabilities of $278 thousand.

For the fiscal year ended June 30, 2024, the

net cash used in operating activities was primarily attributable to a net loss of $4.6 million, partially offset by non-cash stock-based

compensation expense of $732 thousand and depreciation and amortization expense of $311 thousand.

Net cash used in our investing activities totaled

$161 thousand and $322 thousand for the fiscal years ended June 30, 2025 and 2024, respectively.

These investing activities primarily

consisted of purchases of equipment.

Net cash provided by our financing activities

was $15.8 million for the fiscal year ended June 30, 2025, compared to net cash used in our financing activities of $4 thousand for the

same period in 2024.

We received $3.1 million from the issuance of convertible notes, $12.6 million from the Offering, and $25 thousand

from the exercise of stock options for the fiscal year ended June 30, 2025, compared to $4 thousand we used to purchase unvested

restricted shares during the same period in 2024.

Critical Accounting Policies

The accompanying discussion and analysis of our

financial condition and results of operations is based upon our audited consolidated financial statements, which have been prepared in

accordance with GAAP.

We believe certain of our accounting policies are critical to understanding our financial position and results of

Our significant accounting policies and estimates are discussed in the “Notes to Consolidated Financial Statements,

Note 2 — Summary of Significant Accounting Policies.”

Recent Accounting Pronouncements

New accounting pronouncements adopted and under

evaluation are discussed in the “Notes to Consolidated Financial Statements, Note 2 — Summary of Significant 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-K

Item 7. Management’s Discussion and Analysis