ALMU 10-K & 10-Q changes, risk factors and insider trading

Risks Relating to Our Business, Growth Prospects and Operating Results We arehave recentlya formedlimited operating history and onlyremain in the early development stages. Although we have generated some revenue, we are not in volume production for any of our product offerings. Our lack of operating history makes it difficult to evaluate our business and prospects, and may increase the risks associated with an investment in our Common Stock.

BiondWe Photonics,commenced now Aeluma, was formedoperations in 2019. Although the Company haswe have generated some revenue, thewe Company isare subject to the risks involved with any speculative early-stage enterprise. There is no assurance that the Company we will successfully offer,develop, manufacture, market and distribute itsour products or services. TheWe Companyhave and may continue to experience continuing continuing net losses and negative cash flows from operations. The extent of continuing losses and negative cash flows from operations and the time required to reach profitability are highly uncertain. There is no assurance that the Companywe will be able to achieve profitability or that profitability, if achieved, can be sustained on an ongoing basis. There is no assurance that actual cash requirements will not exceed our estimates. Such risks forto the Companyus include, but are not limited to:

In order to address these risks, the Companywe must, among other things:

The CompanyWe cannot make an assurance that it will succeed succeed in addressing these risks.

Historically, we have funded our operations and and capital expenditures primarily through equity issuances and cash generated from our operations. Although we currently anticipate that that our existing cash and cash equivalents and cash flow from operations will be sufficient to meet our cash needs for the foreseeable future, our business may not always generate sufficient cash flow from operations to fund our activities and we may require additional financing, which we may not be able to obtain on favorable terms. If we raise equity financing to fund operations or on an opportunistic basis, our stockholders may experience significant dilution of their ownership interests. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. Additionally, if we need such financing and it is not available to us, or is not available to us on satisfactory terms, our ability to operate and expand our business or to respond to competitive pressures would be limitedlimited, and we could be required to delay, significantly curtail, or eliminate planned operations or other elements of our growth strategy. To reduce this risk, Although we filedhave thea Shelf S3, which allows us to sell any combination of the securities described in theshelf registration statement on file and an at-the-market offering in one or more offerings up to a total dollar amount of proceeds of $100,000,000; however,place, there is no guarantee that we will sell any sharesadditional shares, pursuantthat market conditions will be favorable for such sales, or that proceeds of any offering will be sufficient to thefund Shelfour S3.capital requirements.

There can be no assurance that we can successfully achieve any or all of the above initiatives in the manner or time period that we expect. Further, achieving these objectives will require investments that may result in short-term costs without generating any current revenue and therefore may be dilutive to our earnings. We cannot provide any assurance that we will realize, in full or in part, the anticipated benefits we expect our strategy will achieve. The failure to realize those benefits could have a material adverse effect on our business, financial conditioncondition, and results of operations.

Changes to federal regulatory agencies and policies, including the Department of Commerce, could poseadversely risks related toaffect our business operations and financial outlook.

Our future success is substantially dependent on our ability to attract, retainretain, and motivate the members of our management team and other key employees throughout our organization.organization, including in technical, engineering, sales, and operational roles. The loss of one or more members of our management team or other key employees could materially impact our sales or our R&D programs and materially harm our business, financial condition, results of operations operations, and prospects. We do not maintain key person life insurance policies on any of our management team members or key employees. Competition for highly skilled personnel in the semiconductor and photonics industries is intense.intense, particularly for candidates with expertise in compound semiconductors, heterogeneous integration, and related technologies. We may not be successful in attracting or retaining qualified personnel to fulfill our current or future needs. For positions in our offices near Santa Barbara in particular, we may experience challenges hiring new and mid-level employeesemployees, in part due to the high local housing costs.costs and cost of living. Our competitors may be successful in recruiting and hiring members of our management team or other key employees, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all.

Accounting methods and policies for companies such as ours, including policies governing revenue recognition, leases, R&D and related expenses, and accounting for stock-based compensation, are subject to review, interpretation and guidance from our auditors and relevant accounting authorities, including the SEC. Changes to accounting methods or policies, or interpretations thereof, may require us to reclassify, restate or otherwise change or revise our historical financial statements, including those contained in this prospectus.report.

We willexpect to depend on a limited number of customers and the loss of one or more of these customers could have a material adverse effect on our business, financial condition, and results of operations.

Currently, Aeluma has customer engagements that involve R&D, development of wafers, and delivery of engineering samples for evaluation.evaluation, delivery of small volumes of chips, and R&D contracts. There is no assurance that any of these potential customers will purchase our product after they complete their analysis.analysis, or that any customer engagement, engineering sample, evaluation, NRE effort, or development project will result in a design win, binding purchase order, volume production, or recurring revenue. Since we cannot predict how many of these evaluations will turn into sales, if any, we cannot guarantee that we will generate sufficient revenue to be profitable.

Due to the concentration and ongoing consolidation within the semiconductor industry, we may also find that over the longer term, our revenues are dependent on relatively few customers. If we lose any of these customers, or these customers dodelay, notdispute or fail to pay us,us or experience budgetary, liquidity, administrative or other constraints that impair our ability to collect accounts receivable, our revenues and cash flows could be materially adversely affected.

We expect that our sales will be typically made pursuant to individual purchase orders or customer agreements, and we do not expect to have long-term supply arrangements with our customers requiring a commitment to purchase. We expect that the agreements with our customers may allow them to cancel orders prior to shipment for standard products and, generallygenerally, prior to start of production for custom products without incurring a penalty. We anticipate to routinely generategenerating inventory based on customers’ estimates of end-user demand for their products, which is difficult to predict. In times of under supplyundersupply for certain products, some customers could respond by inflating their demand signals. As markets level off and supply capacity capacity begins to match actual market demands, we could experience an increased risk of inventory write-downs, which may materially adversely affect our results of operations and our financial condition. In addition, our customers may change their inventory practices on short notice for any reason. Furthermore, short customer lead times are standard in the industry due to overcapacity. The cancellation or deferral of product orders, the return of previously sold products, or overproduction of products due to the failure of anticipated orders to materialize could result in excess obsolete inventory, which could result in write-downs of inventory or the incurrence of significant cancellation penalties under our arrangements with our raw materials and equipment suppliers. Unsold inventory, canceled orders, and cancellation penalties may materially adversely affect our results of operations, and inventory write-downs, which may materially adversely affect our financial condition.

Prior to purchasing our products, our customers may require that our products undergo an extensive qualification process, which involves testing of the products in the customer’s system, as well as rigorous reliability testing. This qualification process may continue for a few months or longer, may require us to provide wafers, chips, engineering samples, NRE services, or other support, and we cannot guarantee that products will pass the required tests. tests.Customer selection or a “design win,” if any, does not obligate a customer to place purchase orders or to proceed to volume production. However, qualification of a product by a customer does not ensure any sales of the product to that customer. Even after successful qualification and sales of a product to a customer, a subsequent revision to the product or software, changes in the product’s manufacturing process or the selection of a new supplier by us may require a new qualification process, which may result in delays and in us holding excess or obsolete inventory. After our products are qualified, additional time may be required before the customer commences volume production of components or devices that incorporate our products. Despite these uncertainties, we will devote substantial resources, including design, engineering, sales, marketing and management efforts, toward qualifying our products with customers in anticipation of sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, such failure or delay would preclude or delay sales of such product to the customer, which may impede our growth and cause our business to suffer.

While we believe that we have implemented adequate security measures within our internal information technology and networking systems, our information technology systems may be subject to security breaches, damages from computer viruses, ransomware, phishing attacks, natural disasters, terrorism, power outages, and telecommunication failures. failures.The semiconductor industry has been, and may continue to be, the target of cyber attacks, including those aimed at obtaining intellectual property, disrupting manufacturing processes, or compromising confidential business information. Any system failure or security breach could cause interruptions in our operations in addition to the possibility of losing proprietary informationinformation, trade secrets, or sensitive customer and trade secrets.partner data. To the extent that any disruption or security breach results in inappropriate disclosure of our confidential information, our competitive position may be adversely affected, and we may incur liabilityliability, regulatory penalties, or additional costs to remedy the damages caused by these disruptions or security breaches. We may also be required to expend significant resources to protect against, respond to, and recover from any such attacks or disruptions.

We conduct certain R&D activities and production of our products at external partner facilities, which has the potential to expose third parties to elements of our intellectual property. We rely primarily on a combination of nondisclosure agreements and other contractual provisions,provisions and patent, trade secret and copyright laws to protect our technology and intellectual property. If we fail to protect our technology and intellectual property, our customers, licensees, and others may seek to use our technology and intellectual property without the payment of license fees and royalties, which could weaken our competitive position, reduce our operating results and increase the likelihood of costly litigation. The growth of our business depends in large part on our ability to secure intellectual property rights in a timely manner, our ability to convince third parties of the applicability of our intellectual property rights, and our ability to enforce our intellectual property rights. In certain instances, we attempt to obtain patent protection for portions of our technology, and our agreements may include both issued patents and pending patent applications. If we fail to obtain patents in a timely manner or if the patents issued to us do not cover all of the inventions disclosed in our patent applications, others could use portions of our technology and intellectual property without the payment of license fees and royalties.

Further, the laws and enforcement regimes of certain certain countries do not protect our technology and intellectual property to the same extent as do the laws and enforcement regimes of the U.S. In certain jurisdictionsjurisdictions, we may be unable to protect our technology and intellectual property adequately against unauthorized use, which could adversely affect our business.

If the Companywe cannot effectively manage growth growth by implementing and improving its operational and financial systems, the Company’sour business, prospects, financial condition, and results of operations could be materially adversely affected.

In order to maximize the potential growth in the Company’sour market opportunities, the Companywe may have to expand rapidly and significantly. The impetus for expansion could place a significant strain on theour management, operational and financial resources of the Company.resources. In order to manage growth, the Companywe will be required to implement and continually improve its our operational and financial systems, expand operations, attract and retain superior management and train, manage and expand itsour employee base. The CompanyWe can give no assurance that itwe will effectively manage itsour operations, that itsour system, procedures, or controls will adequately support operations or that our management of the Company will successfully implement its our business plan. If the Companywe cannot effectively manage growth, the Company’sour business, prospects, financial condition and results of operations could be materially adversely affected.

Manufacturing semiconductors is a highly complex and precise process, requiring production in a tightly controlled, clean environment. Minute impurities in our manufacturing materials, contaminants in the manufacturing environment, manufacturing equipment failures, and other defects can cause our products to be non-compliant with customer requirements or otherwise nonfunctional.nonfunctional, Weexposing face an inherent business risk of exposureus to warranty and product liability claims in the event that our products fail to perform as expected or such failure of our products results isare alleged to result in bodily injury or property damage (or both).damage. In addition, if any of our designed products are or are alleged to be defective, we may be required to participate in their recall. A successful warranty or product liability claim against us in excess of our available insurance coverage, if any, and established reserves, or a requirement that we participate in a product recall, could have material adverse effects on our business, results of operations and financial condition. Additionally, in the event thatdamage our products fail to perform as expected or such failure of our products results in a recall, our reputation may be damaged, which couldreputation, make it more difficult for us to sell our products to existing and prospective customers customers, and couldhave materiallymaterial adverselyadverse affecteffects on our business, results of operationsoperations, and financial condition.

Natural disastersdisasters, andpublic health crises, political crises, economic downturns, or other businessunexpected disruptions events could cause significant harm to our business operations and facilities and could facilities, adversely affect our supply chain and our customer base, any of which mayand materially adversely affect our business, results of operation,operations and financial condition.

We expect that our manufacturing and other facilities, asour welloperations, asand the operations of our third-party suppliers,suppliers and technology providers are susceptible to losses and interruptions caused by floods, fires, hurricanes, tornadoes, earthquakes, typhoons, and similar natural disasters, as well as power outages, telecommunications failures, industrial accidents, pandemics, terrorist attacks, war and other political instability, and similar events.events, whether in mainland China or abroad. The occurrence of naturalany disasterssuch event in any of the regions in which wewe, our suppliers, or our supplierstechnology willproviders operate could severely disrupt theour operations ofand ourdaily businessesbusiness activities by negatively impacting our supply chain, our ability to deliver products, and the cost of our products. products, and could adversely affect the economies of the markets in which we operate. Such events can negatively impact revenue and earnings and can significantly impact cash flow, both from decreased revenue and from increased costs associated with the event.event, In addition, these eventsand could cause consumer confidence and spending to decrease. All of the aforementioned risks may be further increased if our disaster recovery plans prove to be inadequate. We may carry insurance to generally compensate for losses of the type noted above, however, even if we obtain such insurance, it may not be adequate to cover all losses that may be incurred or continue to be available in the affected area at commercially reasonable rates and terms. Disruptions or downturns in global, national, or local economic conditions may also cause demand for our products and services to decline, and an economic downturn resulting in a prolonged recessionary period would have a material adverse effect on our business, financial condition, and operating results. To the extent any losses from natural disastersdisasters, public health crises, political crises, or other business disruptions are not covered by insurance, any costs, write-downs, impairments, and decreased revenue can materially adversely affect our business, our results of operations and our financial condition.

ThereWe ismay nobe assuranceunable onto thecomplete futureor successfulsuccessfully completion ofintegrate strategic transactionstransactions, bywhich uscould limit our ability to successfully implementexecute our business strategies.

Our business strategies may depend on our ability to toidentify and complete futurestrategic transactions, including acquisitions, investments, joint ventures, and strategic transactions could be important to the successful implementation of our business strategies, including our strategiespartnerships, to strengthen our geographic diversity and broaden itsour customer base. We may be unable to identify suitable opportunities, reach acceptable terms, obtain required approvals or financing, or successfully integrate completed transactions. Any such failure could limit our ability to execute our business strategies and materially adversely affect our business, results of operations, and financial condition. Successful completion of a strategic manufacturing partnership agreement or other similar transaction depends on a number of factors that are not entirely within our control, including our ability to negotiate acceptable terms, conclude satisfactory agreements and obtain all necessary regulatory approvals. In seeking to partner with another company, we may require capital investment, funding for operations, or dedicated personnel with special skills. If we need to finance this activity, we may not be able to obtain the necessary financing on satisfactory terms and within the timeframe that would permit the transaction to proceed. If any of these factors prevent us from completing one or more strategic transactions, we may not be able to expand our business in the manner and on the schedule that we plan. In addition, we may incur significant costs arising from our efforts to engage in strategic transactions. These costs may exceed the returns that we realize from a given transaction. Moreover, these expenditures may not result in the successful completion of a transaction.

Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and their other occupations. Our officers may be engaged in other business endeavors for which they may be entitled to substantial compensation compensation, and our officers are not obligated to contribute any specific number of hours per week to our affairs. Our directors also serve or may serve as officers or board members for other entities. If our officers’ or directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our ability to carry out our operations and goals. For a complete discussion of our officers’ and directors’ other business affairs, please see the section of this prospectus entitled “Management.”

We expect to subcontract wafer fabrication services to third-party suppliers. suppliers, including foundries. These suppliers also offer such services to other companies, whichand we expect to be a relatively small customer compared to larger semiconductor companies. As a result, we may lead to us not havinghave access to adequate capacity for our needs and our customers’ needs.needs, Weand we may have less control over delivery schedulesschedules, pricing, and overall support versusthan otherlarger customers of andthose usersfacilities. Additionally, certain foundry processes critical to our products may only be available from a limited number of thosesuppliers, creating facilities.concentration risk. If the wafer foundries we use are unable or unwilling to manufacture our products in our required volumes, or at specified times, we may have to identify and qualify acceptable additional or alternative foundries. This qualification process could require significant time and capital, and we may not find sufficient capacity in a timely manner or at an acceptable cost to satisfy our production requirements.

Because we willexpect to depend on third-party manufacturers manufacturers to build portions of our products, we will be susceptible to manufacturing delays and pricing fluctuations that could prevent us from shipping customer orders on time, if at all, or on a cost-effective basis, which may result in the loss of sales, income, and customers.

Our manufacturing processes will rely on many raw materials.materials, components, equipment, logistics providers, and third-party suppliers, including specialty materials such as indium, gallium, arsenic, and others that are essential to III-V compound semiconductor manufacturing. Generally, we expect that our agreements with suppliers of raw materials will impose no minimum or continuing supply obligations, and we will obtain our raw materials and supplies from a large number of sources on a just-in-time basis. From time to time, suppliers of raw materials may extend lead times, limit supplies, or increase prices due to capacity constraints or other factors beyond our control. Shortages could occur in various essential raw materials due to interruptions interruptionin ofsupply, supplyincreased demand, or increasedgeopolitical demand.factors. If we are unable to obtain adequate supplies of raw materials in a timely manner, the costs of our raw materials increase significantly, their quality deteriorates or they give rise to compatibility or performance issues in our products, our results of operations could be materially adversely affected. Geopolitical conflicts, trade restrictions, conflictsand export controls might unfavorably impact the availability of rare earths or rare minerals such as indium, gallium, arsenic, etc., which are used in our manufacturing processes or in the manufacturing of other components in our customers’ systems. China is a significant global supplier of certain critical raw materials and minerals, including materials important to the semiconductor industry, and any restrictions on exports from China or other key supplier countries, or retaliatory actions by those countries, could materially impact our supply chain and increase our costs. If any country or entity decided to reduce or ration the volumes available to us, our supplier eco-system or our customers’ supply-chains,supply chains, our business could be materially adversely impacted.

Our inability to compete effectively could materially adversely affect our business and results of operations. Products or technologies developed by competitors that are larger and have more substantial R&D budgets, or that are smaller and more targeted in their development efforts, may render our products or technologies obsolete or noncompetitive. We also may be unable to market and sell our products if they are not competitive on the basis of price, quality, technical performance, features, system compatibility, customized design, innovation, availability, delivery timing and reliability. If we fail to compete effectively onin developing strategic relationships with customers and customer sales and technical support, our sales and revenue may be materially adversely affected. Competitive pressures may limit our ability to raise prices, and any inability to maintain revenue or raise prices to offset increases in costs could have a significant adverse effect on our gross margin. Reduced sales and lower gross margins would materially adversely affect our business and results of operations.

The semiconductor industry is characterized by the high costs associated with developing marketable products and manufacturing technologies as well as high levels of investment in production capabilities. As a result, the semiconductor industry has experienced, and may continue to experience, significant consolidation among companies and vertical integration among customers. Larger competitors resulting from consolidations may have certain advantages over us, including, but not limited to substantially greater financial and other resources with which to withstand adverse economic or market conditions and pursue development, engineering, manufacturing, marketing, andor distribution of their products; longer independent operating histories; presence in key markets; patent protection; and greater name recognition. In addition, we may be at a competitive disadvantage to our peers if we fail to identify attractive opportunities to acquire companies to expand our business. Consolidation among our competitors and integration among our customers could erode our market share, negatively impact our capacity to compete and require us to restructure our operations, any of which would have a material adverse effect on our business.

We plan to use third-party contractors for certain of our manufacturing activities. Our agreements with these manufacturers may require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require longer-term commitments. We will also be dependent upon a limited number of highly specialized third-party suppliers for required components and materials for certain of our key technologies. Arranging for replacement manufacturers and suppliers can be time-consuming and costly, and the number of qualified alternative providers can be extremely limited. In addition, our foundry, packaging, integration, and other ecosystem partners may not prioritize our programs, maintain capacity for our needs, align with our technology roadmap, or meet the quality, timing, cost, or process requirements needed to scale our products. Our business operations, productivity and customer relations could be materially adversely affected if these contractual relationships were disrupted or terminated, the cost of such services increased significantly, the quality of the services provided deteriorated, or our forecasted needs proved to be materially incorrect.

Special authorizations, permits, and licenses may be required for our operations, which if delayed or denied could materially adversely affect our results of operations and financial condition.

FollowingWe thehave Offering,raised managementapproximately has$60 assessedmillion through ourpublic financialofferings positionfrom March 2025 to date. We have also established an at-the-market offering program to sell up to $50 million of common stock, pursuant to which we have $29.3 million in remaining capacity. The proceeds of these offerings have been used primarily to fund R&D efforts, expand engineering capabilities, and operatingsupport plangeneral andcorporate determined that the previously reported substantial doubt about our ability to continue as a going concern has been alleviated.operations. The proceeds from the Offeringcompleted offerings have provided near-term capital to support our operations and ongoing development efforts. However, we continue to face risks typical of early-stagedevelopment companies,stage includingcompanies including, but not limited capital resources,to, operational and financial challenges, and uncertainty in product development.development, and product-market fit.

Components of Results of Operations

Income tax expense: No income tax expense was recorded for the fiscal years ended June 30, 20252026 and 2024.2025.

As of June 30, 2025,2026, we had cash, cash equivalents, and a certificate of deposit totaling $15.7$56.0 million, compared to $1.3$15.7 million as of June 30, 2024.2025. The increase in cash was primarily attributable to the net proceeds from the Offering,public whichofferings, generatedtotaling gross$43.5 proceedsmillion. These funds are primarily held in cash on deposit and money market funds that invest 100% of $13.8their million,assets offsetin byshort-term underwritingU.S. discountsTreasury and offering expenses totaling $1.2 million.obligations.

Prior to the Offering,public offerings, our operations were primarily financed through the issuance of convertible notes and sales of common stock in private placement transactions. AsWe previously disclosed,intend we had expressed substantial doubt about our ability to continue asto ause goingthe concernnet dueproceeds from the offerings to recurringsupport lossesoperational growth, invest in product development, and negativefund operatingworking capital cash flows.and Withgeneral thecorporate successful completion of the Offering, we believe that substantial doubt about our ability to continue as a going concern has been alleviated for at least the next twelve months.purposes.

During the quarterthree and nine months ended DecemberMarch 31, 2025, 2026, we did not enterentered into anyfour and five new material government contracts.contracts, respectively, that include NASA, the State University of New York, and the Office of the Secretary of Defense. We also continue to perform under existing contracts, including contracts with NASA, the U.S. Navy, the U.S. Department of Energy, and U.S. Defense Advanced Research Projects Agency, which remain significant sources of revenue.

We completed two underwritten public offerings of our common stock, raising net proceeds of $12.6 million in March 2025 and $23.4 million in September 2025. As of DecemberMarch 31, 2025,2026, the the proceeds from these offerings continue to support our working capital, operations, and planned business development activities. No additional equity offerings are planned at this time, but management continues to monitor capital market conditions and may consider future financing if needed.

FollowingTo thesupport offerings,these managementactivities, haswe assessedcompleted public ourofferings financialin positionMarch 2025 and operatingSeptember plan2025, raising gross proceeds of $13.8 million and determined$25.4 thatmillion, therespectively. previouslyThe reportedproceeds substantialhave been doubtused about our abilityprimarily to continuefund research and development efforts, expand engineering capabilities, and support general corporate operations. as a going concern has been alleviated. The proceeds from the completed offerings have provided near-term capital to support our operations and ongoing development efforts. However, we continue to face risks typical of early-stagedevelopment companies,stage includingcompanies including, but not limited capitalto, resources, operational and financial challenges, uncertainty in product developmentdevelopment, and product-market fit.

Interest income consists primarily of interest earned in interest-bearing savings accounts andaccounts, certificates of deposit held at a bank.bank, and money market funds that invest 100% of their assets in short-term U.S. Treasury obligations.

Our results of operations for the sixnine months ended ended DecemberMarch 31, 2025,2026, as compared to the same period of 2024,2025, were as follows ($ in thousands):

Revenue: Revenue increased $564$531 thousand to $2.7$3.9 million, of which $2.6$3.8 million was derived from government contracts and $41 thousand from other products and services for the sixnine months ended DecemberMarch 31, 2025.2026. Revenue was $2.1$3.3 million, of which $1.9$3.1 million was derived from government contracts and $201 thousand from other products and services, for the same period of 2024.2025.

Operating expenses: Operating expenses increased $3.9$5.2 million, or 160.7%,114%, to $6.3$9.7 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to $2.4$4.5 million for the same period in 2024.2025. The increase was primarily driven by an increase in material purchases to support the delivery of our products and services associated with revenue, as well as higher compensation and related costs, including salaries, stock-based compensation and employee benefits driven by new employees hired to support the expansion of the business and scaling of operations.

Other income (expense): Other income (expense)of consists of interest income of $343$668 thousand for the sixnine months ended DecemberMarch 31, 2025,2026 consisted of interest income, compared to other ($3.3expense) millionof $990 thousand for the same period of 2025, comprised of amortization of discount on convertible notes of ($428$715) thousand and changes in fair value of derivative liabilities of $($2.9279) millionthousand, forand theinterest same periodincome of 2024.$3 thousand.

Income tax expense: No income tax expense was recorded for the sixnine months ended DecemberMarch 31, 20252026 and 2024.2025.

As of DecemberMarch 31, 2025,2026, we had cash, cash equivalents, and a certificate of deposit totaling $38.6$37.8 million, compared to $15.7 million as of June 30, 2025. The increase in cash was primarily attributable to net proceeds from the public offerings, totaling $23.4 million. 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, our operations were primarily financed through the issuance of convertible notes and sales of common stock in private placement transactions. AsWe previously disclosed,intend we had expressed substantial doubt about our ability to continue asto ause goingthe concernnet dueproceeds from the offerings to recurringsupport lossesoperational growth, invest in product development, and negativefund operatingworking capital cash flows.and Withgeneral thecorporate successful completion of the offerings, we believe that substantial doubt about our ability to continue as a going concern has been alleviated for at least the next twelve months.purposes.

We will 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.

As of DecemberMarch 31, 2025,2026, we had net working capital, defined as total current assets less total current liabilities, of $39.4$38.6 million, compared to $16.6 million at June 30, 2025. The increase was primarily driven by a $22.9$22.8 million increase in current assets, which rose to $40.3$40.2 million from $17.3 million over the same period, largely due to a $22.8$22.0 million increase in cash and cash equivalents.equivalents, including the certificate of deposit balance at June 30, 2025. Current liabilities totaled $825$1.5 thousandmillion and $705 thousand as of December March 31, 20252026 and June 30, 2025, 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.

Net cash used in our operating activities was $1.1$1.6 million and $1.3$1.1 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. For the sixnine months ended DecemberMarch 31, 2026, 2025, the net cash used in operating activities primarily resulted from a net loss of $3.3$5.1 million and decreasesa decrease in accountsprepaids payableand other current assets of $177 $699 thousand, primarily offset by non-cash stock-based compensation expense of $2.1$3.2 million and depreciationan andincrease amortizationin expenseaccounts payable of $210$612 thousand. For the sixnine months ended DecemberMarch 31, 2024,2025, the net cash used in operating activities was primarily attributable to a a net loss of $3.6$2.2 million,million increasesand a decrease in accounts receivable of $1.3$1.1 million and prepaid and other current assets of $115 thousand, and a decrease in accounts payable of $134 thousand.million. These amounts were partially offset by non-cash expenses expenses, including changesstock-based incompensation fair value of derivative liabilitiesexpense of $2.9$1.1 million, amortization of discount on convertible notes of $428$715 thousand, stock-based compensation expensedepreciation of $316 thousand, and depreciation and amortization expense of $202$307 thousand, and changes in fair value of derivative liabilities of $278 thousand.

Net cash used in our investing activities totaled $241$439 thousand and $41$85 thousand for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. These investing activities primarily consisted consisted of purchases of equipment.

Net cash provided by our financing activities was $24.1 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to net cash provided by our financing activities of $3.1$15.7 million for the same period in 2024.2025. WeFor the nine months ended March 31, 2026, we received $23.4 million, net of offering costs, from the public offering, $690 thousand from the exercise of stock warrants warrants, and $64$103 thousand from the exercise of stock optionsoptions. forFor the sixnine months ended DecemberMarch 31,1, 2025, comparedwe toreceived $12.6 million, net of offering costs, from the public offering and $3.1 million from the issuance of convertible notes during the same period in 2024.notes.