Aeluma, Inc. — Form 10-Q Summary
Reporting period: The filing covers the quarter and nine months ended March 31, 2023 (fiscal third quarter 2023), not 2022 Q3 as stated in the request metadata. The interim financial statements are unaudited.
Business context
Aeluma is a research-and-development-stage company developing infrared optical sensors and optoelectronic devices, including technologies intended for imaging, 3D sensing and LiDAR applications. It reported no revenue in either the three- or nine-month periods presented.
Financial results and liquidity
| Metric | Three months ended March 31, 2023 | Nine months ended March 31, 2023 | Comparable 2022 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating expenses | $1.57 million | $4.29 million | $0.97 million; $2.37 million |
| Operating loss | $1.57 million | $4.29 million | $0.97 million; $2.37 million |
| Net loss | $1.46 million | $4.07 million | $0.91 million; $2.14 million |
| Basic and diluted loss per share | $0.13 | $0.37 | $0.09; $0.20 |
For the three- and nine-month comparisons, respectively, general and administrative expense was $842,000 and $2.00 million; research and development expense was $429,000 and $1.65 million. The filing attributes the increase in nine-month operating expenses and net loss primarily to startup activity and stock-based compensation. Other income for the nine months was $219,000, mainly sublease rental and other income. With no revenue, a revenue margin is not meaningful.
- Cash and working capital: Cash was $4.86 million at March 31, 2023, versus $3.74 million at June 30, 2022. Net working capital was $4.54 million.
- Cash flows, nine months: Operating cash use was $2.70 million; investing cash use was $256,000; financing provided $4.07 million. Cash increased $1.12 million.
- Liabilities: Total liabilities were $1.12 million, including operating lease liabilities of $499,000 ($161,000 current and $338,000 long term). No other borrowing balance is presented.
- Equity financing: The company raised $4.34 million gross in its private placement through March 31, 2023, issuing 1,447,332 shares; net financing cash proceeds were $4.07 million.
Material changes and outlook
Nine-month operating expenses rose $1.92 million and net loss increased $1.93 million year over year. Operating cash use increased $1.28 million, while investing cash use fell $461,000 from the prior-year period. Management reported no revenue to date and expects losses and significant expenditures to continue as it develops its business.
Management stated that March 31 cash was insufficient to complete the business plan and that additional capital would be needed, potentially through debt or equity. Its stated steps to support operations for the next 12 months and beyond were raising capital or financing, controlling overhead and expenses, and pursuing material sales or research contracts. There were no formal agreements for these steps as of the report. The filing states these conditions raise substantial doubt about the company’s ability to continue as a going concern; no assurance is given that financing will be available on acceptable terms.
After quarter-end, on May 10, 2023, Aeluma issued 570,166 shares for $1.71 million gross proceeds, paid a $137,000 cash placement fee, and agreed to issue placement-agent warrants for up to 44,933 shares. The cover page reports 12,817,500 common shares outstanding as of May 10.
Risks, contingencies and other notable items
- Management concluded disclosure controls and procedures were not effective as of March 31, 2023. It reported no material change in internal control over financial reporting during the quarter.
- Product development, financing, competition, intellectual-property protection, supplier disruptions and equipment lead times are identified risks. The company also notes that equity financing could dilute shareholders and debt financing could impose restrictions.
- The company reported no legal proceedings expected to have a material adverse effect and no defaults upon senior securities. It disclosed registration-rights liquidated damages of up to 8% of covered shares, but said it expected to meet its obligations and recorded no liability.
- There is no specific revenue or earnings guidance in the filing. Management’s outlook is conditional on obtaining financing, controlling costs, and securing commercial or research contracts.
Important facts for investors to verify
- Whether the May 2023 financing and any further capital raise provide sufficient runway, and on what terms.
- Progress toward customer contracts, commercial revenue, and product development milestones.
- Plans and timing to remediate ineffective disclosure controls.
- Potential dilution from outstanding options, warrants, and future equity financing; the filing reports 1,006,000 options and 400,720 warrants outstanding at March 31, 2023.
- The filing period: it is the quarter ended March 31, 2023, despite the request metadata’s “2022 Q3” label.