Aeluma, Inc. — Form 10-K Summary
Reporting period: Fiscal year ended June 30, 2023, compared with fiscal 2022. Although the request metadata says “2022 Q4,” this filing is an annual report for fiscal 2023. Aeluma develops compound-semiconductor optoelectronic devices for sensing and communications and remains in the research-and-development stage.
Business context and operating progress
The company is developing photodetectors and detector arrays, using compound semiconductor materials integrated on large-diameter silicon substrates. Target markets include 3D imaging, LiDAR, mobile and consumer devices, industrial, automotive, defense and aerospace, and communications. During fiscal 2023, Aeluma began recognizing revenue from product samples and a government research-and-development contract. It reported 11 full-time and 2 part-time employees at June 30, 2023.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $193,339 | $0 |
| Cost of revenue | $109,395 | $0 |
| Gross profit and margin | $83,944; approximately 43.4% | Not applicable |
| Operating expenses | $5,703,024 | $3,733,522 |
| Operating loss | $(5,509,685) | $(3,733,522) |
| Other income | $130,103 | $281,823 |
| Net loss | $(5,379,582) | $(3,451,699) |
| Basic and diluted loss per share | $(0.47) | $(0.32) |
| Cash and cash equivalents at year-end | $5,071,690 | $3,740,722 |
| Working capital | $4,576,807 | $4,058,409 |
| Net cash used in operating activities | $(3,637,972) | $(2,252,791) |
| Net cash used in investing activities | $(672,545) | $(955,667) |
| Net cash provided by financing activities | $5,641,485 | $161,930 |
Revenue comprised $15,000 of product sales and $178,339 from a government contract. Cash increased by $1,330,968 during the year. Current assets were $5,333,906 and current liabilities were $757,099 at June 30, 2023. The balance sheet reports lease liabilities of $458,662 in total ($162,210 current and $296,452 long term); no other debt balance is reported there.
Changes versus the prior year
- Revenue increased from zero as the company recorded its first sales and government-contract revenue.
- Net loss widened by $1,927,883. Management attributed the increase chiefly to higher salaries, stock-based compensation and research-and-development activity; operating expenses rose about 53%.
- Operating cash use increased by $1,385,181, while cash on hand rose, principally because of private-placement proceeds.
- Other income declined, mainly because sublease income ended when the sublease expired in March 2023.
Outlook, risks and notable items
- Going concern: The auditor included an explanatory paragraph stating that significant operating losses, negative operating cash flows and limited revenue raise substantial doubt about the company’s ability to continue as a going concern. Management says additional capital and sustainable revenue are needed; it expects losses to continue in the near term.
- Funding plans: Management identified raising capital or financing, controlling overhead and expenses, and securing material sales or research contracts as steps toward sustaining operations for the next 12 months and beyond. It had no formal agreements for these actions as of the report date and gave no quantitative revenue or earnings guidance.
- Financing and dilution: From December 2022 through May 2023, the company issued 2,017,498 shares at $3 per share for gross proceeds of $6,052,500, before $411,015 of placement-agent fees and expenses. Further financing may be unavailable or unfavorable; equity financing would dilute shareholders.
- Execution and market risks: The business has a limited operating history, early-stage products and limited customer revenue. Commercialization, manufacturing scale-up, customer acceptance and competition remain uncertain. Export-control and sanctions rules may also constrain sales or operations.
- Controls: Management concluded that disclosure controls and internal control over financial reporting were ineffective at June 30, 2023. The stated material weakness was insufficient personnel with technical accounting and SEC-reporting expertise to address certain control disciplines and complex, non-routine transactions. The auditor did not attest to internal controls.
- Audit and contingencies: The auditor gave an unqualified opinion on the financial statements but highlighted the going-concern uncertainty; it reported no critical audit matters. The company reported no material pending legal proceedings.
- Subsequent event: On September 10, 2023, the company exercised its option to repurchase 649,750 unvested restricted shares from former COO Lee McCarthy for $4,001. The filing reports 12,817,500 shares outstanding at June 30, 2023 and 12,167,930 at September 20, 2023; investors should confirm the post-year-end share reconciliation.
Most important facts for investors to verify
- Whether Aeluma can raise sufficient capital on acceptable terms and fund operations beyond the stated 12-month planning horizon.
- Progress converting sample deliveries and the government contract into repeat commercial orders, material revenue and improved margins.
- Cash burn, remaining liquidity, capital spending and the timing and cost of manufacturing scale-up.
- Remediation of the disclosed material weakness and improvement in disclosure and financial-reporting controls.
- The effect of future equity issuance, outstanding options and warrants, and the September 2023 share repurchase on fully diluted ownership.