Aeluma, Inc. — Form 10-Q Summary
Reporting period: The filing covers the quarter ended March 31, 2022 and the nine months then ended (Aeluma’s fiscal third quarter of fiscal 2022), not 2021 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 technology aimed at imaging, 3D sensing, and LiDAR applications. It reported no revenue to date. The company’s fiscal year ends June 30; its 2021 merger with Biond Photonics was accounted for as a reverse acquisition and recapitalization.
Key financial metrics
| Metric | Three months ended March 31, 2022 | Nine months ended March 31, 2022 | Comparable 2021 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating expenses | $970,415 | $2,370,006 | $13,663 quarter; $23,325 nine months |
| Other income | $56,038 | $229,284 | $0 |
| Net loss | $914,377 | $2,140,722 | $14,463 quarter; $24,125 nine months |
| Basic and diluted loss per share | $0.09 | $0.20 | $0.00 quarter; $0.01 nine months |
Gross margin and operating margin are not meaningful because the company had no revenue. For the nine months, net cash used in operating activities was $1,416,839; net cash used in investing activities was $716,499; and net cash provided by financing activities was $161,930. Cash declined by $1,971,408 to $4,815,842.
At March 31, 2022, total assets were $7,197,528, current assets $5,584,921, working capital $5,166,427, and total liabilities $919,837. Liabilities primarily included operating lease obligations: $153,164 current and $501,343 long term. The filing reports no borrowings at period end.
Material changes versus comparable periods
- Nine-month net loss increased to $2,140,722 from $24,125, primarily as operations started and expenses rose, including stock-based compensation related to advisor agreements.
- Nine-month operating expenses increased to $2,370,006 from $23,325. Sublease and other income was $229,284, including rental income from subleasing part of the company’s facility.
- Cash fell from $6,787,250 at June 30, 2021 to $4,815,842 at March 31, 2022; working capital declined from $7,185,135 to $5,166,427. The company attributed the cash and current-asset decline primarily to startup operations and facility setup.
- Investing outflows increased to $716,499 from $109,684, mainly for equipment and facility improvements. Operating cash use increased to $1,416,839 from $79,163.
- Common shares outstanding increased from 10,535,002 at June 30, 2021 to 10,650,002 at March 31, 2022. The company also reported 304,750 outstanding options and 360,000 placement-agent warrants, each with a $2.00 exercise price.
Outlook, risks, and other notable items
- Going concern: Management said cash was insufficient to complete the business plan and that additional capital would be needed. The company disclosed substantial doubt about its ability to continue as a going concern. It expects continued losses and significant spending before meaningful positive operating cash flow.
- Management’s stated plans include seeking financing, controlling overhead, and pursuing material sales or research contracts. As of the report date, it had no formal agreements for these steps and gave no quantified financial guidance.
- Additional financing may not be available on acceptable terms; debt could restrict operations and equity financing could dilute shareholders. The filing also cites development, manufacturing, competition, intellectual-property, personnel, and technology risks.
- Disclosure controls and procedures were reported ineffective as of March 31, 2022. The company said it intended to work on maintaining effective controls; it reported no material change in internal control over financial reporting during the quarter.
- The company disclosed a registration-rights agreement with potential liquidated damages capped at 8% of covered shares, but management expected to meet its obligations and recorded no liability. Management reported no subsequent events through May 16, 2022 and no legal proceedings expected to have a material adverse effect.
Investor facts to verify
- Whether Aeluma can raise additional capital, on what terms, and how much runway the reported cash provides.
- Progress toward product development, manufacturing readiness, customer or research contracts, and revenue generation.
- The drivers and sustainability of operating expenses, including stock-based and deferred compensation.
- Remediation of ineffective disclosure controls and procedures.
- Potential dilution from future financing, outstanding options and warrants, and registration-rights obligations.