UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from _______ to _______
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| |
| (Address of principal executive offices) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 9, 2026, there were
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Aeluma, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
($ in thousands, except per share data)
| September 30, 2026 (unaudited) |
June 30, 2026 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaids and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment: | ||||||||
| Equipment | ||||||||
| Leasehold improvements | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | ||||||||
| Right-of-use asset - operating | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Lease liability – operating, current portion | ||||||||
| Total current liabilities | ||||||||
| Lease liability - operating, long-term portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
1
Aeluma, Inc. and Subsidiary
Condensed Consolidated Statements of Operations (unaudited)
($ in thousands, except per share data)
| Three Months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses: | ||||||||
| Cost of revenue | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest income | ||||||||
| Total other income | ||||||||
| Loss before income tax expense | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding – basic and diluted | ||||||||
The accompanying notes are an integral part of these financial statements.
2
Aeluma, Inc. and Subsidiary
Condensed Consolidated Statement of Stockholders’ Equity (unaudited)
For the Three Months Ended September 30, 2026 and 2025
($ in thousands)
| Common Stock | Additional Paid-in |
Accumulated | Total Stockholders’ |
|||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, July 1, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Restricted stock units vested, net of shares surrendered for tax withholding | ( | ) | ( | ) | ||||||||||||||||
| Stock options exercised, net of shares surrendered for tax withholding | ||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock | Additional Paid-in |
Accumulated | Total Stockholders’ |
|||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, July 1, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of common stock, net of offering costs | ||||||||||||||||||||
| Restricted stock units vested, net of shares surrendered for tax withholding | ||||||||||||||||||||
| Stock options exercised, net of shares surrendered for tax withholding | ||||||||||||||||||||
| Stock warrants exercised | ||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
3
Aeluma, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows (unaudited)
($ in thousands)
| Three Months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation expense | ||||||||
| Depreciation and amortization expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaids and other current assets | ( | ) | ||||||
| Other assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities: | ||||||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing activities: | ||||||||
| Proceeds from stock option exercise | ||||||||
| Proceeds from public offering, net of offering costs | ||||||||
| Payment for taxes related to net share settlement of stock options and restricted stock units | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental non-cash disclosures: | ||||||||
| Right-of-use asset - operating obtained in exchange for lease liability - operating | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
4
Aeluma, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (unaudited)
Note 1 – The Company and Basis of Presentation
Throughout these notes, “the Company,” “Aeluma,” “we,” “us,” “its,” and “our” refer to Aeluma, Inc. and our wholly owned subsidiary Aeluma Operating Co. (“Subsidiary”).
Aeluma develops high-performance photonic and electronic technologies for communications and sensing in telecom, artificial intelligence (“AI”) datacom, mobile, defense and aerospace, robotics, automotive, augmented reality/virtual reality (“AR/VR”), and quantum applications. The Company’s proprietary platform combines compound semiconductor materials with large-diameter substrates to leverage manufacturing infrastructure used in high-volume microelectronics. Aeluma’s technology and product development activities have focused on photodetectors, photodetector arrays, lasers, optical amplifiers, and other technologies. The Company’s photodetectors and photodetector arrays can detect near infrared (“NIR”) and shortwave infrared (“SWIR”) light. Its lasers and optical amplifiers are primarily based on quantum dot technology. Aeluma’s platform may also be applied to other photonic and electronic devices including transistors and solar cells.
The accompanying condensed consolidated financial statements have been presented in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany balances and transactions are eliminated in consolidation. There were no significant intercompany balances or transactions during the three months ended September 30, 2026 and 2025. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who is responsible for the Company’s integrity and objectivity. This Quarterly Report on Form 10-Q for the period ended September 30, 2026, should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2026. The accompanying consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by GAAP. The interim financial data are unaudited; however, in the opinion of Aeluma, the interim data include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Results for interim periods are not necessarily indicative of those to be expected for the full year.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Cash and Cash Equivalents
The Company considers cash in banks, deposits in transit, and highly liquid investments with original maturity of three months or less to be cash and cash equivalents. As of September 30, 2026, cash and cash equivalents consisted of cash on deposit and an investment in money market funds. The Company’s investment in money market funds is classified within Level 1 of the fair value hierarchy because it is valued using quoted market prices in active markets. The fund invests
5
Segments
The Company’s chief operating decision maker (“CODM”), the , manages the Company’s business activities as
Property and Equipment
Property, equipment, and leasehold improvements are reported at historical cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally from three to seven years for property and equipment. Leasehold improvements are amortized over the lesser of the remaining lease term or the estimated useful life of the improvements. Repairs and maintenance to these assets are charged to expenses as incurred; major improvements enhancing the function and/or the asset’s useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gains or losses arising from such transactions are recognized.
Leases
The Company determines whether an arrangement contains a lease at inception. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments. ROU assets and lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate at the lease commencement date. The Company includes lease extension and termination options in the lease term when it is reasonably certain, based on consideration of relevant economic factors, that such options will be exercised.
The Company elected the short-term lease exemption for leases with an initial term of
Operating lease expense, including amortization of ROU assets and interest accretion on lease liabilities, is recognized on a straight-line basis over the lease term and included in operating expenses in the condensed consolidated statements of operations.
6
Revenue Recognition
The Company follows a five-step approach for recognizing revenue: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when, or as, the entity satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customer. For performance obligations that are satisfied at a single point in time, the Company recognizes revenue at the point when control transfers, which is typically upon delivery, customer acceptance, or another specified milestone defined in the contract. For performance obligations satisfied over time, revenue is recognized as progress is made toward completion, using a measure that best depicts the transfer of control to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expenses. The Company does not have any significant financing components associated with its revenue contracts, as payment is received within one year. The Company currently draws revenue from two primary sources:
| ● | Commercial product and service contracts: Revenue is currently generated from multiple customers for Research and development (“R&D”)-related services and small-volume orders. |
| ● | Government contracts: Revenue is principally generated from R&D contracts with agencies of the U.S. government or with prime contractors. These contracts may include cost-reimbursement or fixed-price terms. |
The Company capitalizes certain incremental costs incurred to obtain or fulfill a contract when such costs are expected to be recoverable in accordance with ASC 340, Other Assets and Deferred Costs. Prepaid costs, such as advance payments to vendors or subcontractors directly related to a customer contract, are recorded as assets and subsequently expensed consistent with the transfer of goods or services to the customer.
Government contracts include both cost-reimbursement and fixed-price contracts. Cost-reimbursement contracts provide for the reimbursement of allowable costs plus the payment of a fee. These contracts fall into four basic types: (i) cost-sharing contract under which government reimburses only a portion of the incurred costs, (ii) cost plus fixed fee contracts which provide for the payment of a fixed fee irrespective of the final cost of performance, (iii) cost plus incentive fee contracts which provide for increases or decreases in the fee, within specified limits, based upon actual results as compared to contractual targets relating to such factors as cost, performance and delivery schedule, and (iv) cost plus award fee contracts which provide for the payment of an award fee determined at the discretion of the customer based upon the performance of the contractor against pre-established criteria. Under cost-reimbursement type contracts, the contractor is reimbursed periodically for allowable costs and is paid a portion of the fee based on contract progress. Fixed-price contracts establish a set price for goods or services, which may be firm or adjustable under specific conditions. Adjustable fixed-price contracts can include elements such as ceiling or target prices, which are only subject to change through contract clauses that allow for equitable adjustments. Firm-fixed-price contracts do not permit any price changes based on the contractor’s actual costs, placing full financial risk and responsibility on the contractor. In contrast, fixed-price contracts with economic price adjustments allow for price changes, either increases or decreases, based on predefined events or conditions.
For the three months ended September 30, 2026, government contracts were awarded. For the three months ended September 30, 2025, the Company was awarded one government contract of $
As of September 30, 2026, total remaining performance obligations under all obligated government contracts amounted to approximately $
Stock-Based Compensation
The Company accounts for stock-based compensation arrangements in accordance with guidance issued by the Financial Accounting Standards Board (“FASB”), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, consultants, and directors based on estimated fair values.
The Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model for stock options. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations. The Company estimates the fair value of stock-based compensation awards using the Black-Scholes model. This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the stock options, all of which are highly complex and rely on subjective variables. For employees and directors, the expected life was calculated based on the simplified method as described by the U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 110, Share-Based Payment. For other service providers, the expected life was calculated using the contractual term of the award. The Company’s estimate of expected volatility was based on the volatility of peers. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the options. The Company accounts for forfeitures upon occurrence.
7
The Company estimates the fair value of restricted stock units (“RSUs”) on the date of grant based on the fair market value of the Company’s common stock. The value of the portion of the award that is ultimately expected to vest is recognized as stock-based compensation expense over the requisite service periods in the Company’s consolidated statements of operations. Because RSUs do not include exercise features, the valuation of these awards does not require the use of an option-pricing model or assumptions related to expected volatility, expected term, or risk-free interest rates. The Company accounts for forfeitures upon occurrence.
Income (Loss) Per Share
Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of shares underlying stock options, RSUs, and warrants, are not reflected in diluted loss per share because such shares are anti–dilutive. The dilutive impact of potential common shares resulting from common stock equivalents is determined by applying the treasury stock method. For the three months ended September 30, 2026,
Income Taxes
The Company is expected to have net operating loss carryforwards (“NOL”) that it can use to offset a certain amount of taxable income in the future. The amount of NOL carryforwards available to offset future taxable income is determined based on the Company’s taxable losses and is calculated annually. Accordingly, the total NOL carryforward balance is updated annually based on the Company’s tax position. The resulting deferred tax assets will be offset by a valuation allowance due to the uncertainty of their realization. The primary difference between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to income before income taxes relates to the recognition of a valuation allowance for deferred income tax assets.
The Company has adopted FASB ASC 740-10, “Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not as a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties totaled $0 for the periods presented. The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized, at which point such tax years are closed.
The Company files tax returns in the U.S. federal jurisdiction and the state of California. The Company’s federal and state return forms are subject to review by the taxing authorities. The Company is not currently under examination by any taxing authority, nor has it been notified of an impending examination.
Concentration of Risk
The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company’s accounts are insured by the FDIC up to federally insured limits.
The Company manages its credit risk associated with exposure to its direct customers on outstanding accounts receivable through the application of credit approvals and other monitoring procedures. The Company closely monitors the aging of accounts receivable from its direct customers. Significant customers are those that represent 10% or more of revenue or accounts receivable. For the three months ended September 30, 2026,
8
New Accounting Pronouncements Adopted
In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This guidance is effective for annual reporting periods beginning after December 15, 2025, and for interim periods within those annual reporting periods, with early adoption permitted. The amendments in ASU 2025-05 should be applied prospectively. The Company adopted ASU 2025-09 during the quarter ended September 30, 2026 and the adoption did not have a material impact on the Company’s financial position, results of operations, or related disclosures.
Recent Accounting Pronouncements under Evaluation
In November 2024, the FASB issued ASU. 2024-03, Disaggregation of Income Statement Expenses (DISE). The ASU requires additional disclosure regarding specific types of expenses included in the income statement. This guidance applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of this new standard on its consolidated financial statements, however the adoption is not expected to have a significant impact on the consolidated financial statements.
Note 2 – Stockholders’ Equity
Authorized Shares
The Company’s certificate of incorporation authorizes the issuance of two classes of shares of capital stock. The total number of shares that this corporation is authorized to issue is
Registration Rights Agreement
The Company is party to a registration rights agreement pursuant to which it has filed a registration statement on Form S-1 with the SEC, which was declared effective on March 26, 2025 and converted into a Form S-3 pursuant to a post-effective amendment effective February 6, 2026. The agreement provides for certain liquidated damages upon the occurrence of certain events restricting the holder’s ability to trade the common stock as result of the Company’s failure to maintain their registration for resale or trading suspensions or halts. The liquidated damages are capped at eight percent of the shares covered by the registration rights agreement. The registration statement initially covered the resale of
Public Offerings of Common Stock
On September 19, 2025, the Company sold
On March 20, 2026, the Company entered into a sales agreement, pursuant to which the Company may sell shares of the Company’s common stock having an aggregate offering price of up to $
Note 3 – Stock-Based Compensation
The Company’s 2021 Equity Incentive Plan (the “2021 Plan”) provides for the issuance of shares of common stock pursuant to awards of stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards, cash awards, and stock bonus awards. The number of shares reserved for issuance under the 2021 Plan is eligible to increase automatically on January 1 of each year through 2031 by an additional number of shares equal to the lesser of (x)
9
Restricted Stock Units
RSUs are rights to acquire shares of the Company’s common stock that vest and settle in accordance with terms and conditions established by the Company’s 2021 Plan and any forms of agreement approved by the administrator of the 2021 Plan.
For the three months ended September 30, 2026, the Company granted RSUs to employees, representing rights to acquire up to
For the three months ended September 30, 2025, the Company granted RSUs to employees, representing rights to acquire up to
The following is a schedule summarizing RSU activity for the periods presented:
| Number of Shares | Weighted Average Grant Date Fair Value Per Share | |||||||
| Beginning balance, July 1, 2026 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Canceled | ||||||||
| Ending balance, September 30, 2026 | $ | |||||||
| Number of Shares | Weighted Average Grant Date Fair Value Per Share | |||||||
| Beginning balance, July 1, 2025 | ||||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Canceled | ||||||||
| Ending balance, September 30, 2025 | $ | |||||||
Stock Options
For the three months ended September 30, 2026, the Company granted employees options to purchase
For the three months ended September 30, 2025, the Company granted options to purchase
10
The Company estimates the fair value of each option granted using the Black-Scholes option-pricing model. The Company used the following assumptions to estimate the fair value of stock options for the period presented:
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Weighted-average fair value | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Expected term | ||||||||
| Dividend yield | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
The following is a schedule summarizing stock option activities for the periods presented ($ in thousands, except per share data):
| Number of Options | Weighted Average Exercise Price | Aggregate Intrinsic Value (1) | ||||||||||
| Outstanding at July 1, 2026 | $ | $ | ||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Canceled | ||||||||||||
| Outstanding at September 30, 2026 | $ | $ | ||||||||||
| Exercisable at September 30, 2026 | $ | $ | ||||||||||
| Number of Options | Weighted Average Exercise Price | Aggregate Intrinsic Value (1) | ||||||||||
| Outstanding at July 1, 2025 | $ | $ | ||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Canceled | ( | ) | ||||||||||
| Outstanding at September 30, 2025 | $ | $ | ||||||||||
| Exercisable at September 30, 2025 | $ | $ | ||||||||||
| (1) |
For the three months ended September 30, 2026 and 2025, the Company recognized stock-based compensation expense related to stock options and RSUs of $
Note 4 – Operating Lease
The Company entered into an amendment dated November 20, 2025, which modified its existing lease originally executed on February 22, 2021, for a facility in Goleta, California, reflecting the exercise of one of the two original sixty-month extension options and extending the lease term for an additional
The Company is a party to a
11
The following table presents maturities of operating lease liabilities on an undiscounted basis as of September 30, 2026 ($ in thousands):
| Years ending September 30, | ||||
| Remainder of 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| Total | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liability - operating | ||||
| Less: lease liability - operating, current portion | ||||
| Lease liability - operating, long-term portion | $ | |||
The weighted average remaining lease term and the discount rate for the lease at September 30, 2026 are
Note 5 – Warrants
All of our outstanding warrants to purchase common stock are exercisable at any time prior to their expiration dates and include a provision that allows for cashless exercise at the time of exercise. Under the cashless exercise provision, the holder may elect to receive a reduced number of shares of common stock determined according to a formula based on the fair market value of the Company’s common stock at the time of exercise, rather than paying the exercise price in cash.
The following warrants to purchase common stock were outstanding as of September 30, 2026:
| Number of Shares | Exercise Price | Expiration Date | ||||||
| $ | ||||||||
12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
This report contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,” “perceive,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “views,” “will,” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those discussed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, and in this Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
You should read the following discussion and analysis of our financial condition and results of operations, together with our consolidated financial statements and the related notes and other financial information included in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the disclosure under the heading “Risk Factors” in other filings we make with the SEC for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should not place undue reliance on forward-looking statements as predictive of future results.
Overview
Aeluma, Inc. (together with our subsidiary, “we,” “our,” “us,” or the “Company”) develops high-performance photonic and electronic technologies for communications and sensing in telecom, artificial intelligence (“AI”) datacom, mobile, defense and aerospace, robotics, automotive, augmented reality/virtual reality (“AR/VR”), and quantum applications. Our proprietary platform combines compound semiconductor materials with large-diameter substrates to leverage manufacturing infrastructure used in high-volume microelectronics. Our technology and product development activities have focused on photodetectors, photodetector arrays, lasers, optical amplifiers, and other technologies. Our photodetectors and photodetector arrays can detect near-infrared (“NIR”) and shortwave infrared (“SWIR”) light. Our lasers and optical amplifiers are primarily based on quantum dot technology. Aeluma’s platform may also be applied to other photonic and electronic devices, including transistors and solar cells.
13
Our headquarters are in Goleta, California. Our principal research and development (“R&D”) and manufacturing facility is approximately 9,000 square feet and includes a cleanroom and equipment used for epitaxy wafer production, process development, prototyping, wafer-scale testing, and validation. During fiscal year 2026, we expanded our internal test and prototyping capabilities through the acquisition of automated and semi-automated wafer probers, packaging and prototyping equipment, test and validation instruments, and related facility infrastructure. We have extended the lease for our principal facility through March 2031 to support anticipated growth, and we also lease approximately 2,400 square feet of additional office space near our headquarters. We may require additional space in the future to support continued growth.
We leverage a capital-efficient manufacturing model that combines internal materials production, process-development, prototyping, and test capabilities with external fabrication, packaging, and integration. We have relationships with production-scale foundries and other supply-chain partners, including relationships announced during fiscal year 2026 with Tower Semiconductor and Sumitomo Chemical Advanced Technologies for wafer production and fabrication. We expect these external capabilities to be important to our ability to qualify manufacturing processes and increase production capacity if substantial customer demand develops.
We are transitioning from a predominantly R&D-stage business toward commercialization. Our revenue currently consists of government development contracts, with emerging commercial development and product revenue. We have delivered wafers, chips, and engineering samples, performed non-recurring engineering projects, and have begun accepting initial commercial sales orders. These initial commercial orders have been relatively small, and commercial customers generally require extensive evaluation and qualification before committing to production volumes.
Plan of Operations
Our operating priorities are to advance product development, complete customer and manufacturing qualifications, deliver on existing commercial and government contracts, increase manufacturing readiness, and convert qualified customer engagements into recurring product revenue. We expect to continue investing in engineering, materials growth, wafer fabrication, packaging, testing, quality systems, sales, and business development.
We intend to continue supplying engineering samples, prototype wafers and chips, small volume products, and development services while customers evaluate our technology. We plan to work directly with prospective customers and with system integrators, module manufacturers, Tier-1 suppliers, component suppliers, semiconductor companies, and government prime contractors. We also intend to continue working with external foundries, packaging providers, and integration partners to establish repeatable, qualified production flows that can support large volumes.
The timing and scale of commercialization will depend on several factors, including technical performance, reliability testing, customer qualification, product design decisions, supply chain readiness, and market demand. We may continue to derive a substantial portion of our revenue from government and customer development programs while commercial products progress through qualification.
Results of Operations
Our results of operations for the three months ended September 30, 2026, as compared to the same period of 2025, were as follows ($ in thousands):
| Three Months Ended September 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Revenue | $ | 568 | $ | 1,385 | $ | (817 | ) | -59 | % | |||||||
| Operating expenses | 4,816 | 2,993 | 1,823 | 61 | % | |||||||||||
| Other income (expense) | 492 | 115 | 377 | 328 | % | |||||||||||
| Loss before income tax expense | (3,756 | ) | (1,493 | ) | (2,263 | ) | 152 | % | ||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net loss | $ | (3,756 | ) | $ | (1,493 | ) | $ | (2,263 | ) | 152 | % | |||||
14
Revenue: Revenue decreased $0.8 million to $0.6 million for the three months ended September 30, 2026, compared to $1.4 million for the same period in 2025. The decrease was primarily attributable to the completion of the first phase of one large government contract, partially offset by revenue generated from four new government contracts.
Operating expenses: Operating expenses increased $1.8 million, or 61%, to $4.8 million for the three months ended September 30, 2026, compared to $3.0 million for the same period in 2025. The increase was primarily driven by an increase in compensation and related costs, including salaries, stock-based compensation and employee benefits driven by new employees as well as increased general and administrative, and R&D expenses to support the expansion of the business and scaling of operations.
Other income (expense): Other income, consisting entirely of interest income, totaled $0.5 million for the three months ended September 30, 2026, compared to $0.1 million for the same period in 2025.
Income tax expense: No income tax expense was recorded for the three months ended September 30, 2026 and 2025.
Liquidity and Capital Resources
As of September 30, 2026, we had cash and cash equivalents totaling $53.9 million, compared to $56.0 million as of June 30, 2026. These funds are primarily held in cash on deposit and money market funds that invest 100% of their assets in short-term U.S. Treasury obligations.
Prior to the public offerings of common stock in March 2025 and September 2025, our operations were primarily financed through the issuance of convertible notes and sales of common stock in private placement transactions. We intend to continue to use the net proceeds from the offerings to support operational growth, invest in product development, and fund working capital and general corporate purposes.
On March 20, 2026, we entered into a sales agreement under which we may, from time to time, offer and sell shares of our common stock, par value $0.0001 per share, for aggregate gross proceeds of up to $50.0 million, through an “at-the-market” offering program (the “ATM Program”). During the fourth quarter of fiscal year 2026, we sold 830,484 shares of our common stock under the ATM program, resulting in net proceeds of $20.1 million, after deducting commissions and other offering expenses. We did not sell any shares under the ATM program or raise any proceeds during the first quarter of fiscal year 2027.
On July 29, 2026, we entered into a letter of intent with the U.S. Department of Commerce for up to $30 million in proposed funding under the CHIPS and Science Act. The proposed funding is intended to support R&D of our semiconductor manufacturing platform. The contemplated award remains subject to further due diligence, required governmental approvals, and the execution of definitive award documents. If finalized and received, the funding could serve as a potential source of capital to support our R&D activities and strengthen our liquidity position; however, until the applicable conditions are satisfied and definitive agreements are executed, the funding is not a committed source of liquidity.
We continue to assess our capital requirements and may pursue additional financing opportunities to support long-term growth initiatives or respond to changes in market conditions.
15
As of September 30, 2026, we had net working capital, defined as total current assets less total current liabilities, of $53.0 million, compared to $55.4 million at June 30, 2026. The decrease was primarily driven by a $2.2 million decrease in current assets, which decreased to $55.1 million from $57.3 million over the same period, largely due to a $2.1 million decrease in cash and cash equivalents since June 30, 2026. Current liabilities totaled $2.1 million and $1.9 million as of September 30, 2026 and June 30, 2026, respectively, and the balances primarily consisted of accounts payable, along with accrued expenses and other short-term obligations expected to be settled within one year. We believe that our current cash and cash equivalents balances, cash generated from operations and our ability to raise additional funds pursuant to the ATM program will be sufficient to fund our business operations and capital expenditures for the next twelve months and beyond.
The following table shows a summary of our cash flows for the periods presented ($ in thousands):
| Three Months Ended September 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Net cash provided by (used in) | ||||||||||||||||
| Operating activities | $ | (1,746 | ) | $ | (815 | ) | $ | (931 | ) | 114 | % | |||||
| Investing activities | (252 | ) | (210 | ) | (42 | ) | 20 | % | ||||||||
| Financing activities | (133 | ) | 23,432 | (23,565 | ) | -101 | % | |||||||||
| Increase (decrease) in cash and cash equivalents | $ | (2,131 | ) | $ | 22,407 | $ | (24,538 | ) | -110 | % | ||||||
Net cash used in our operating activities was $1.7 million and $0.8 million for the three months ended September 30, 2026 and 2025, respectively. For the three months ended September 30, 2026, the net cash used in operating activities primarily resulted from a net loss of $4.3 million, primarily offset by non-cash stock-based compensation expense of $1.4 million, a decrease in prepaids and other current assets of $0.3 million and an increase in accrued expenses and other current liabilities of $0.4 million. For the three months ended September 30, 2025, the net cash used in operating activities primarily resulted from a net loss of $1.5 million, and increases in accounts receivable of $0.3 million and prepaids and other current assets of $0.2 million, primarily offset by non-cash stock-based compensation expense of $1.1 million.
Net cash used in our investing activities totaled $0.3 million for each of the three months ended September 30, 2026 and 2025. These investing activities primarily consisted of purchases of equipment.
Net cash used in our financing activities was $0.1 million for the three months ended September 30, 2026, compared to net cash provided by financing activities of $23.4 million for the same period in 2025. For the three months ended September 30, 2026, we received $0.2 million from the exercise of stock options and paid $0.3 million in taxes related to net share settlement of stock options and restricted stock units. For the same period in 2025, we received $23.4 million, net of offering costs, from the public offering.
Critical Accounting Estimates
The accompanying discussion and analysis of our financial condition and results of operations is based upon our audited condensed consolidated financial statements, which have been prepared in accordance with GAAP. We believe certain of our accounting policies are critical to understanding our financial position and results of operations. Our significant accounting policies and estimates are discussed in Note 1 to the Condensed Consolidated Financial Statements “The Company and Basis of Presentation.”
16
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), based on their evaluation of our disclosure controls and procedures as of September 30, 2026, concluded that our disclosure controls and procedures were not effective as of that date.
Material Weakness and Related Remediation Initiatives
A material weakness in internal control over financial reporting is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis.
As disclosed in our annual report on Form 10-K for the fiscal year ended June 30, 2026, our management identified a material weakness in our internal control over financial reporting due to an insufficient number of personnel with appropriate technical accounting capabilities and effective control disciplines to evaluate, account for, and properly record certain non-routine and complex transactions.
Notwithstanding the material weakness described above, management believes the consolidated financial statements included in this report fairly present, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with GAAP.
Management continue to implement corrective actions to remediate the identified material weakness, including increasing accounting resources, enhancing the review and oversight of significant and non-routine transactions, and further developing and formalizing our internal control framework. We have engaged a third-party firm with expertise in internal controls and internal audit to assist management in assessing our control environment enhancing internal control over financial reporting, and supporting the design, implementation and testing of remediation activities, including testing the design and operating effectiveness of key controls.
Management continues to evaluate and enhance our processes and controls and expects to implement additional controls and procedures as appropriate. The material weakness will not be considered remediated until the relevant controls have been implemented and operated for a sufficient period of time, and management has concluded through testing that such controls are operating effectively. The timing of remediation will depend on the implementation and evaluation of these controls.
Changes in internal control over financial reporting.
There were no changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
17
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently involved in any material legal proceedings. From time to time, we may be involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements. We could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is adverse to us, our financial position and prospects could be harmed.
Item 1A. Risk Factors.
This Quarterly Report on Form 10-Q should be read in conjunction with the risk factors included in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026. We are not aware of any material changes to the risk factors disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
We did not sell any other equity securities that were not registered under the Securities Act during the quarter ended September 30, 2026, that were not otherwise disclosed in our Current Reports on Form 8-K.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Amendment to Bylaws
Effective November 12, 2026, our Board of Directors approved an amendment and restatement of our Bylaws to defer to the current state statute with respect to production of a stockholder list in connection with our annual meeting of stockholders.
The foregoing description is qualified by the full text of the Amended and Restated Bylaws, which is filed as Exhibit 3.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference.
Insider Trading Arrangements and Related Disclosure
During the three months ended September 30, 2026, no director or executive officer
As previously reported in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, on May 23, 2026, Jonathan Klamkin, our President, Chief Executive Officer, and Chairman of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that provided for the sale of up to 300,000 shares of our common stock. Subsequent to the end of the period covered by this report, on October 21, 2026, Dr. Klamkin terminated the 10b5-1 trading arrangement.
18
Annual Meeting Timing
As previously announced, our Board of Directors established November 19, 2026 as the date of our next annual meeting of stockholders (the “Annual Meeting”). The exact time and virtual attendance details for the Annual Meeting were specified in a definitive proxy statement that was filed with the Securities and Exchange Commission on September 30, 2026.
The date of the Annual Meeting is more than 30 days before the anniversary of our prior annual meeting of stockholders. Accordingly, stockholders who, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), desire to present proposals (other than director nominations) for inclusion in Aeluma’s proxy materials relating to the Annual Meeting were required to follow the procedures provided in Rule 14a-8 and our bylaws. To be timely, such proposals must have been delivered to or mailed and received by our corporate secretary on or before the close of business on September 26, 2026, which was a reasonable time before printing and mailing of our proxy materials for the meeting.
Stockholders who intend to propose an item of business for consideration at the Annual Meeting, but not have it included in our proxy statement, or intending to nominate a person for election as a director at the Annual Meeting, must have provided timely written notice of such proposal or nomination. To be timely under our bylaws, such notice also must have been delivered to or mailed and received by our corporate secretary no later than the close of business on September 26, 2026.
In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the nominees selected by our board of directors also must have provided notice that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than September 26, 2026.
Item 6. Exhibits.
| * | Furnished and not filed for purposes of Section 18 of the Exchange Act. |
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Aeluma, Inc. | ||
| Date: November 12, 2026 | By: | /s/ Jonathan Klamkin |
| Name: | Jonathan Klamkin | |
| Title: | President and Chief Executive Officer (Duly Authorized Officer) | |
| Date: November 12, 2026 | By: | /s/ Christopher Stewart |
| Name: | Christopher Stewart | |
| Title: | Chief Financial Officer (Principal Financial Officer and Accounting Officer) | |
20