What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-05-09 · 255 added, 147 removed, 124 unchanged (76% of the section changed)

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and Subsidiary.

You should read the following discussion and analysis

of our financial condition and results of operations, together with our consolidated financial statements and the related notes and other

financial information included in this report.

Some of the information contained in this discussion and analysis or set forth elsewhere

in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that

involve risks and uncertainties.

You should review the disclosure under the heading “Risk Factors” in other filings we make

with the SEC for a discussion of important factors that could cause actual results to differ materially from the results described in

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

You should not place undue reliance on

forward-looking statements as predictive of future results.

Special Note Regarding Forward-Looking Statements

This report contains forward-looking statements

and information that are based on the beliefs of our management as well as assumptions made by and information currently available to

Such statements should not be unduly relied upon.

Forward-looking statements include statements about our expectations, beliefs, plans,

objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions.

Forward-looking

statements and information can generally be identified by the use of forward-looking terminology or words, such as “anticipate,”

“approximately,” “believe,” “continue,” “estimate,” “expect,” “forecast,”

“intend,” “may,” “ongoing,” “pending,” “perceive,” “plan,” “potential,”

“predict,” “project,” “seeks,” “should,” “views” or similar words or phrases

or variations thereon, or the negatives of those words or phrases, or statements that events, conditions or results “can,”

“will,” “may,” “must,” “would,” “could” or “should” occur or be

achieved and similar expressions in connection with any discussion, expectation or projection of future operating or financial performance,

costs, regulations, events or trends.

The absence of these words does not necessarily mean that a statement is not forward-looking.

Forward-looking statements and information are

based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in

circumstances that are difficult to predict.

These statements reflect our current view concerning future events and are subject to risks,

uncertainties, and assumptions.

There are important factors that could cause actual results to vary materially from those described in

this report as anticipated, estimated or expected, as well as general conditions in the economy, capital markets, the U.S.

and Exchange Commission (the “SEC”) regulations which affect trading in the securities of “penny stocks,” and

other risks and uncertainties.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or

to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information

becomes available in the future.

Depending on the market for our stock and other conditional tests, a specific safe harbor under the Private

Securities Litigation Reform Act of 1995 may be available.

Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended

(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

expressly state that the safe harbor for forward-looking statements does not apply to companies that issue penny stock.

Because we may

from time to time be considered to be an issuer of penny stock, the safe harbor for forward-looking statements may not apply to us at

certain times.

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

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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.

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.

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 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.

On September 5, 2025, the Company commenced a new five-year lease for an

office adjacent to its existing facility to accommodate anticipated headcount growth and support future expansion.

Aeluma is a transformative semiconductor company

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

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

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

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

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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.

In September 2025, we received a contract with

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

The new contract

will help advance our efforts to commercialize entangled photon sources, a critical enabler for quantum computing and communication systems.

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.

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 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 September 2024, we received an $11.7 million

contract with U.S.

Defense Advanced Research Projects Agency (“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

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.

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

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 mature in June 2026 and do not carry any interest.

The Notes are convertible into shares of the Company’s

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 $5,000,000 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

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”)).

In 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 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

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

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

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”);

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The Floor Price for the investors who participated

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

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 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.

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”)

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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.

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.

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

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

See Public Offerings of Common

Stock in Note 2 – Convertible Notes

Public Offerings 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.

stock at a price of $5.25 per share (the “March 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 March Offering closed on

March 28, 2025.

The March 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

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

Total gross proceeds from the March Offering,

including the over-allotment option, were $13.8 million.

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

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

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

In connection with the March 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 exceptions.

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.

On September 17, 2025, the Company entered into

an Underwriting Agreement (“UA”) with Craig-Hallum Capital Group LLC, as the representative of the several underwriters named

therein (the “Underwriters”), relating to the issuance and sale by the Company of 1,700,000 shares of the Company’s

common stock, par value $0.0001 per share in its previously announced public offering (the “September Offering”).

offering price in the September Offering was $13.00 per share of Common Stock.

In connection with the September Offering, the Company

granted the Underwriters a 30-day option to purchase up to 255,000 additional shares of its Common Stock at the public offering price,

less the underwriting discount, and on September 18, 2025, the Underwriters exercised such option to purchase an additional 255,000 shares

of Common Stock.

The September Offering closed on September 19, 2025.

The net proceeds to the Company from the September

Offering were $23.4 million, after deducting underwriting discounts and commissions and after payment of offering expenses.

The Company intends to use the net proceeds from

the September Offering, together with its existing cash and cash equivalents, for expansion of business development efforts including

(i) advancing manufacturing processes for production;

(ii) hiring new employees;

and (iii) working capital and general business purposes.

The Company made the September Offering pursuant

to the Company’s effective shelf registration statement on Form S-3 (File No.

333-289135) previously filed

with and declared effective by the SEC and a prospectus supplement and accompanying prospectus filed with the SEC on September 18, 2025.

Other Recent Events

On August 4, 2025, the Company appointed Christopher

Stewart as its Chief Financial Officer.

Pursuant to Mr.

Stewart’s employment agreement, he was granted 110,000 stock options

and 55,000 restricted stock units (“RSUs”).

The stock options have an exercise price of $21.04, with 25% of

the stock options vesting on the twelve (12) month anniversary of Mr.

Stewart’s employment with the Company.

The balance of the

stock options will vest in equal monthly increments, on each monthly anniversary of Mr.

Stewart’s employment start date with the

Company, over the next thirty-six (36) months.

The stock options expire on the 10-year anniversary of their vesting date.

the shares underlying the RSUs will vest at the end of the fiscal quarter following the twelve (12) month anniversary of Mr.

employment start date with the Company, with a pro-rated amount for any partial quarter preceding the twelve (12) month anniversary.

balance of the RSUs will vest in equal quarterly increments, with a pro-rated amount for any partial final quarter.

Each restricted stock

unit represents the contingent right to receive, at settlement, one share of common stock.

Plan of Operations

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technologies that scale for mass markets.

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

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

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

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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

public offerings on March 26, 2025 and September 22, 2025, raising gross proceeds of $13.8 million and $25.4 million, respectively, there

can be no assurance that these funds will be sufficient to carry out all aspects of our business plan.

Following the offerings, 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.

The proceeds from the offerings 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

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

and wafers delivered.

All such costs are derived through an allocation of R&D expenses that are directly associated with specific

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

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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,

Our results of operations for the three months

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

Three Months Ended September 30,

Operating expenses

Other income (expense)

Loss before income tax expense

Income tax expense

$ (2,163,550 )

$ (3,573,480 )

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.

Revenue increased $904 thousand

to $1.4 million, of which $1.34 million was derived from government contracts and $41 thousand from other products and services for the

three months ended September 30, 2025.

Revenue was $481 thousand, of which $431 thousand was derived from government contracts and $50

thousand from other products and services, for the same period of 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):

increased $1.8 million, or 146.9%, to $3.0 million for the three months ended September 30, 2025, compared to $1.2 million for the same

period in 2024.

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

driven by new employees hires to support the expansion of the business and scaling of operations.

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.

Other (income)

expense consists of interest income of $115 thousand for the three months ended September 30, 2025, compared to amortization of discount

on convertible notes of ($145) thousand, changes in fair value of derivative liabilities of $146 thousand, and interest income of $1 thousand

for the three months ended for the same period of 2024.

Income tax expense :

No income tax expense was recorded for the

nine months ended March 31, 2025 and 2024.

No income tax expense

was recorded for the three months ended September 30, 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

As of September 30, 2025, we had cash, cash equivalents,

and a certificate of deposit totaling $38.1 million, compared to $15.7 million as of June 30, 2025.

The increase in cash was primarily

attributable to the net proceeds from the public offerings, which generated gross proceeds of $25.4 million, offset by underwriting discounts

and offering expenses totaling $2.0 million.

Prior to the offerings, our operations were primarily

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

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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

With the successful completion of the offerings, 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

We intend to use the net proceeds from the offerings

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

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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.

As of September 30, 2025, we had working capital

of $39.5 million, compared to $16.6 million as of June 30, 2025.

The increase was primarily driven by a $22.9 million increase in current

assets, which rose to $40.2 million from $17.3 million over the same period, largely due to a $22.4 million increase in cash, cash equivalents,

and a certificate of deposit.

Current liabilities totaled $768 thousand and $705 thousand as of September 30, 2025 and June 30, 2025,

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:

Nine Months Ended March 31,

flows for the periods presented ($ in thousands):

Three Months Ended September 30,

Net cash provided by (used in)

Operating activities

$ (1,082,677 )

$ (2,876,190 )

Investing activities

Financing activities

Increase (decrease) in cash

$ (3,197,125 )

Increase in cash and cash equivalents, and certificate of deposit

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.

$815 thousand and $931 thousand for the three months ended September 30, 2025 and 2024, respectively.

For the three months ended September

30, 2025, the net cash used in operating activities primarily resulted from a net loss of $1.5 million, and increases in accounts receivable

of $286 thousand and prepaids and other current assets of $196 thousand, primarily offset by non-cash stock-based compensation expense

of $1.1 million.

For the three months ended September 30, 2024, the net cash used in operating activities was primarily attributable to

a net loss of $730 thousand, increases in accounts receivable of $262 thousand, prepaids and other current assets of $167 thousand, and

changes in fair value of derivative liabilities of $146.

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

compensation expense of $167 thousand, amortization of discount on convertible notes of $145 thousand, and depreciation and amortization

expense of $100 thousand.

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.

$210 thousand and $2 thousand for the three months ended September 30, 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.

was $23.4 million for the three months ended September 30, 2025, compared to net cash provided by our financing activities of $3.1 million

for the same period in 2024.

We received $23.4 million, net of offering costs, from the public offering and $47 thousand from the exercise

of stock options for the three months ended September 30, 2025, compared to $3.1 million from the issuance of convertible notes during

the same period in 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

We have established various accounting policies

that govern the application of U.S.

generally accepted accounting principles (GAAP) in the preparation of our financial statements.

significant accounting policies are described in the Notes to Consolidated Financial Statements in our 2025 Annual Report on Form 10-K.

We had no significant changes in what constituted our accounting policies since the filing of our fiscal year 2025 Annual Report on Form

Certain accounting policies require us to make

significant estimates and assumptions that have a material impact on the carrying value of certain assets and liabilities, and we consider

these to be critical accounting policies.

For a description of these critical accounting policies, see Notes to Consolidated Financial

Statements, Note 1 — The Company and Basis of Presentation in this Report on Form 10-Q.

Actual results could differ significantly

from these estimates and assumptions, which could have a material impact on the carrying value of assets and liabilities at the balance

sheet dates and our results of operations for the reporting periods.

Recent Accounting Pronouncements

New accounting pronouncements under evaluation

are discussed in the “Notes to Consolidated Financial Statements, Note 1 — The Company and Basis of Presentation.”

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