Aeluma, Inc. — Form 10-Q Summary
Reporting period: Fiscal second quarter and six months ended December 31, 2021; the quarter ended December 31, 2021. The company changed its fiscal year to July 1–June 30. Financial statements are unaudited.
Business context
Aeluma is a research-and-development-stage company developing infrared optical sensors and related optoelectronic devices. It aims to combine compound semiconductor materials with silicon wafers for imaging, 3D sensing, lidar, and other applications. The June 2021 merger with Biond Photonics was treated as a reverse acquisition and recapitalization for accounting purposes.
Financial performance and position
| Metric | Three months ended Dec. 31, 2021 | Six months ended Dec. 31, 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $704,814 | $1,399,590 |
| Other income | $82,119 | $173,245 |
| Net loss | $622,695 | $1,226,345 |
| Basic and diluted loss per share | $0.06 | $0.12 |
- For the six months, net cash used in operating activities was $895,184; investing activities used $570,248, mainly for equipment and facility improvements; financing activities provided $161,930. Cash declined by $1,303,502 to $5,483,748.
- At December 31, 2021, total assets were $8,089,313, total liabilities $938,496, and stockholders’ equity $7,150,817. Working capital was $5,987,614.
- Liabilities included $692,274 of operating lease obligations ($153,164 current and $539,110 long term). No separate funded debt balance is shown on the balance sheet.
- Gross margin and operating margin are not meaningful because the company reported no revenue. The filing does not provide a clear revenue or margin outlook.
Changes versus prior comparable periods
- Six-month operating expenses rose from $9,662 in 2020 to $1,399,590 in 2021, and net loss increased from $9,662 to $1,226,345, reflecting startup activity and stock-based compensation. Revenue was zero in both periods.
- Six-month operating cash flow shifted from $2,431 provided in 2020 to $895,184 used in 2021; investing cash use was $570,248 versus $106,228 in 2020.
- Compared with June 30, 2021, cash fell by about $1.30 million, current assets fell by about $1.09 million, and current liabilities rose by about $112,000.
Outlook, risks, and notable items
- Management states that the company has not generated revenue, expects continued losses and significant spending, and says the $5.48 million cash balance is insufficient to complete its business plan. The company says it needs additional capital, through debt or equity, or revenue-generating activities; financing may not be available on acceptable terms and equity funding would dilute shareholders.
- The filing identifies substantial doubt about the company’s ability to continue as a going concern. Management’s stated priorities include raising capital, controlling expenses, installing and bringing equipment online, conducting development runs, and pursuing customer contracts and research agreements. No quantified guidance or formal financing agreements are provided.
- Sublease and other income was $173,245 for the six months, including rental income and reimbursements. Stock-based compensation included $333,955 of deferred compensation amortization during the period.
- Management concluded disclosure controls and procedures were not effective as of December 31, 2021. It reported no material change in internal control over financial reporting during the quarter.
- The company reported no material legal proceedings known to it and no subsequent events through February 14, 2022. It cautions that technology development, competition, financing, personnel, and execution risks could affect results.
Important facts for investors to verify
- Cash burn, capital requirements, and the company’s ability to obtain financing and sustain operations.
- Progress and costs for cleanroom preparation, equipment installation, development runs, and commercial customer commitments.
- Whether support letters, anticipated wafer purchase agreements, or planned research and sales contracts convert into revenue.
- Drivers of operating expenses and the amount and timing of remaining deferred stock compensation.
- Remediation of ineffective disclosure controls, and the terms and potential dilution from securities issued or reserved, including options and placement-agent warrants.