Aeluma, Inc. — Form 10-Q Summary
Reporting period: Three months ended September 30, 2023 (fiscal first quarter); filed November 9, 2023. Financial statements are unaudited. Aeluma develops optoelectronic devices, including infrared sensors, and remains in the research and development stage.
Financial results and liquidity
- Revenue: $32,400, all from product sampling purchases, versus no revenue in the prior-year quarter. Cost of revenue was $15,139; reported gross profit was $17,261, or approximately 53% of revenue.
- Expenses and loss: Research and development expense was $834,869 and general and administrative expense was $665,103. Total expenses were $1,515,111. Net loss was $1,482,309 ($0.12 per basic and diluted share), compared with a $1,530,041 loss ($0.14 per share) a year earlier.
- Cash flow: Operating cash use was $1,303,362, investing cash use was $7,100, and financing cash use was $4,001. Cash declined $1,314,463 during the quarter to $3,757,227.
- Liquidity: Current assets were $4,020,067 and current liabilities were $598,721, resulting in working capital of $3,421,346. The company reported an accumulated deficit of $10,544,375.
- Debt and leases: The filing reports no conventional borrowings in the presented balance sheet. Operating lease liabilities totaled $1,160,390, including $121,893 current and $1,038,497 long term. A lease extension option was deemed reasonably certain on July 1, 2023, increasing the recorded right-of-use asset and lease liability.
Changes versus the prior-year quarter
- Revenue increased from zero to $32,400, but remained limited to sampling purchases.
- Operating expenses declined $51,576, primarily due to lower insurance expense, partly offset by increased R&D activity and stock-based compensation.
- Other income fell $36,244 to $402, primarily because the facility sublease ended in March 2023; the prior-year quarter included $31,351 of sublease income.
- Net loss improved by $47,732. Operating cash use was lower by $13,377, while investing cash use fell by $45,560.
Outlook, risks, and notable items
- Going concern: Management and the financial-statement notes state that substantial additional funding is needed and that conditions raise doubt about the company’s ability to continue as a going concern. Management says cash is insufficient to complete its business plan and expects losses and significant expenditures to continue near term.
- Management’s stated plan includes raising capital or obtaining financing, controlling overhead, and securing material sales or research contracts. As of the report date, it had no formal agreements for the financing or other planned steps. Future financing is uncertain and could dilute shareholders or impose restrictions.
- Subsequent event: On October 12, 2023, Aeluma received a U.S. Navy firm-fixed-price award for silicon photonics integration services and materials, payable upon completion of planned deliveries through October 21, 2024. The filing does not state the award amount.
- Controls: Management concluded disclosure controls and procedures were not effective as of September 30, citing insufficient finance staffing and inadequate precision, evidence, or timeliness in review controls. No material changes to internal control over financial reporting were reported during the quarter.
- The company repurchased 649,570 unvested shares from a former executive for $4,001; shares outstanding declined to 12,167,930 at quarter-end. The filing reports no material ongoing legal proceeding known to the company and no income tax expense for either comparative quarter.
Key facts for investors to verify
- Whether the Navy award’s value, delivery milestones, and expected cash receipts are disclosed in later filings.
- Cash runway, quarterly cash burn, and the timing and terms of any additional financing.
- Progress converting sampling orders and development activity into material recurring revenue or funded contracts.
- Remediation of the finance-staffing and review-control deficiencies.
- Lease-extension commitments and the effects of future share issuance, options, and warrants on dilution.