Nuburu(BURU) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Cautionary Note Regarding Forward-Looking Statements This section highlights that the Quarterly Report contains forward-looking statements subject to substantial risks and uncertainties - Forward-looking statements are not guarantees of performance and are subject to substantial risks and uncertainties, including the company's ability to obtain financing, maintain NYSE American listing, achieve commercialization, and successfully implement its business plan[10][11][12] Item 1. Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for Nuburu, Inc., along with comprehensive notes Condensed Consolidated Balance Sheets The balance sheets show a significant decrease in total assets and a substantial increase in total liabilities | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :-------------------------- | :------------------ | | Assets | | | | Cash and cash equivalents | $111,090 | $209,337 | | Inventories, net | — | $1,526,467 | | Property and equipment, net | — | $4,834,729 | | Total current assets | $1,730,653 | $1,898,553 | | TOTAL ASSETS | $2,479,253 | $6,970,052 | | Liabilities & Equity | | | | Accounts payable | $5,127,709 | $6,301,310 | | Accrued expenses | $5,663,216 | $4,301,195 | | Current portion of notes payable | $11,108,841 | $9,242,183 | | Preferred stock liability | $21,889,050 | — | | Total current liabilities | $43,912,752 | $20,788,893 | | TOTAL LIABILITIES | $47,228,975 | $20,917,508 | | Total Stockholders' Deficit | $(44,749,722) | $(37,836,506) | - Total assets decreased by approximately $4.5 million, primarily due to the write-down of inventories and property and equipment to zero as of June 30, 2025, following a lease default[18][39][40] - Total liabilities more than doubled, increasing by approximately $26.3 million, largely due to the reclassification of convertible preferred stock from mezzanine equity to a current liability of $21,889,050[18][195] Condensed Consolidated Statements of Operations The statements of operations show no revenue and an increased net loss, driven by significant non-operating expenses | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $0 | $49,278 | $0 | $142,827 | | Gross margin | $4,538 | $(684,448) | $(231,179) | $(1,447,855) | | Loss from operations | $(4,617,687) | $(3,235,207) | $(7,660,109) | $(7,763,494) | | Net loss | $(12,224,975) | $(12,638,883) | $(28,836,400) | $(18,343,981) | | Net loss per common share, basic and diluted | $(0.18) | $(7.57) | $(0.43) | $(14.15) | | Weighted-average common shares (basic and diluted) | 66,284,524 | 1,670,052 | 49,771,075 | 1,296,478 | - Revenue declined to nil for both the three and six months ended June 30, 2025, from $49,278 and $142,827 respectively in the prior year, primarily due to cost reduction measures and employee furloughs impacting commercialization[20][315][331] - Net loss for the six months ended June 30, 2025, increased to $(28,836,400) from $(18,343,981) in the prior year, significantly impacted by a $10,398,050 non-cash interest expense from preferred stock liability remeasurement and a $6,064,823 loss on impairment of assets[20][33][351] Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit These statements reflect preferred stock reclassification, significant common stock issuances, and an increased accumulated deficit - Convertible preferred stock was reclassified from mezzanine equity to current liabilities, reducing the preferred stock balance to nil from $23,889,050 at December 31, 2024[23][195] - Common Stock shares outstanding increased significantly from 20,274,238 at December 31, 2024, to 70,292,737 at June 30, 2025, primarily due to issuances for debt extinguishment and services[23] - Accumulated deficit increased from $(131,806,605) at December 31, 2024, to $(150,244,955) at June 30, 2025, reflecting the net loss incurred during the period[23] Condensed Consolidated Statements of Cash Flows Cash flows indicate a net decrease in cash, with significant cash used in operating and investing activities | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,986,504) | $(4,322,227) | | Net cash used in investing activities | $(1,250,000) | $0 | | Net cash provided by financing activities | $5,138,257 | $2,290,715 | | NET CHANGE IN CASH | $(98,247) | $(2,031,512) | | CASH AND CASH EQUIVALENTS ―END OF PERIOD | $111,090 | $117,188 | - Net cash used in operating activities decreased slightly to $(3,986,504) in 2025 from $(4,322,227) in 2024, primarily due to non-cash expenses like preferred stock remeasurement and asset impairment, partially offset by an increased net loss[26][362][363] - Net cash used in investing activities was $(1,250,000) in 2025, compared to nil in 2024, due to payments for a convertible note receivable and a deposit on an acquisition[26][365] - Net cash provided by financing activities increased to $5,138,257 in 2025 from $2,290,715 in 2024, mainly from proceeds from new debt instruments and the Liqueous Settlement Agreement[26][367] Notes to Condensed Consolidated Financial Statements The notes provide detailed explanations of the company's financial statements, covering policies, debt, and equity NOTE 1. BACKGROUND AND ORGANIZATION This note outlines the company's formation, emerging growth status, financial challenges, and asset impairment - The Company is an emerging growth company that has not yet achieved full commercialization and has incurred significant operating losses and negative cash flows, with an accumulated deficit of $150,244,955 as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern[32][33][355] - Nuburu received a NYSE Regulation Notice of Noncompliance on April 29, 2025, for failing to maintain stockholders' equity of $2.0 million, but its detailed plan to regain compliance by October 29, 2026, was accepted[35][36] - Due to a lease default, the company recorded a $6,064,823 loss on impairment, writing down inventories, property and equipment, and operating lease right-of-use assets to zero as of June 30, 2025[39][40][313] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note describes the basis of presentation, consolidation principles, reverse stock split, and new accounting pronouncements - The Company effected a 1-for-40 reverse stock split on July 23, 2024, retroactively adjusting all share and per share amounts[45] - As an 'emerging growth company' under the JOBS Act, Nuburu has elected to use the extended transition period for complying with new or revised financial accounting standards[46][47] - The Company adopted the fair value option for certain debt instruments and a convertible note receivable, recognizing subsequent changes in fair value in the statements of operations[51] - New accounting standards ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures) are effective for future periods, and the Company is evaluating their impact[53][54] NOTE 3. BALANCE SHEET COMPONENTS This note details components of inventories, property and equipment, prepaid expenses, and accrued expenses - Inventories, net, decreased from $1,526,467 at December 31, 2024, to nil at June 30, 2025, due to a $1,526,467 write-down following a lease default[18][59][60] - Property and equipment, net, decreased from $4,834,729 at December 31, 2024, to nil at June 30, 2025, as the carrying value of all assets at the leased location was deemed unrecoverable[18][61] Accrued Expenses | Accrued Expenses | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Accrued legal, accounting and professional fees | $3,174,608 | $2,448,594 | | Accrued TCEI acquisition costs | $735,127 | — | | Accrued lease-related payables | $409,278 | $54,288 | | Total accrued expenses | $5,663,216 | $4,301,195 | NOTE 4. FAIR VALUE MEASUREMENTS This note details fair value measurements of financial instruments, focusing on Level 3 assets and liabilities - The Company's financial instruments carried at fair value primarily consist of Level 3 assets and liabilities, which rely on unobservable inputs and significant judgment in valuation[67][69] Financial Instrument Fair Values | Financial Instrument | June 30, 2025 (Level 3) | December 31, 2024 (Level 3) | | :----------------------------------- | :------------------------ | :-------------------------- | | Convertible Note Receivable | $748,600 | — | | Junior Note Warrants | $18,301 | $128,615 | | Notes payable - fair value option | $9,510,017 | — | | SEPA liability | $3,297,922 | — | | Convertible note derivative liability | — | $37,900 | | Total Level 3 Assets/Liabilities | $13,574,840 | $166,515 | - Key inputs for Level 3 valuations include stock price, expected term, expected volatility, risk-free interest rate, and expected dividend yield, with specific ranges provided for the Convertible Note Receivable and Junior Note Warrants[70][71] NOTE 5. CONVERTIBLE NOTE RECEIVABLE This note details the Convertible Note Receivable agreement with SYME, bearing 14.33% annual interest - On March 14, 2025, Nuburu entered into a convertible facility to loan SYME up to $5.15 million, with $650,000 funded as of June 30, 2025[79][285] - The Convertible Note Receivable bears 14.33% annual interest and is convertible into SYME ordinary shares at a fixed ratio, potentially giving Nuburu a controlling interest[79] - The Company elected the fair value option for the Convertible Note Receivable, with its fair value at June 30, 2025, being $748,600[80] NOTE 6. COMMITMENTS AND CONTINGENCIES This note details various commitments and contingencies, including lease default, settlement, and acquisition agreement - The Company defaulted on its Centennial, Colorado office lease, resulting in a $409,278 default judgment and the impairment of related assets (inventory, property and equipment, right-of-use asset)[81][82][83] - A settlement with Liqueous LP resulted in $1,450,000 in payments to the Company, with $1,000,000 received in Q1 2025 and $300,000 in April 2025, and the extinguishment of Junior Notes[87][287] - Nuburu entered a commitment letter with Trumar Capital LLC (TCEI) to acquire technology and controlling interests in defense-tech and SaaS companies, with the first stage involving a $1.5 million cash payment and $23.5 million in a cancellable note[93][94] - The Company has $455,048 in outstanding firm purchase commitments for inventory and R&D parts[90] NOTE 7. REVENUE This note details revenue-generating activities, disaggregated by geography and timing, reporting no revenue for current periods - Revenue for both the three and six months ended June 30, 2025, was nil, a decrease from $49,278 and $142,827, respectively, in the prior year[100] - The decrease in revenue is primarily due to management's cost reduction measures, including employee furloughs, which significantly impacted commercialization and operations[315][331] Revenue by Geography | Geography | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $0 | $0 | $0 | $15,000 | | Asia | $0 | $7,566 | $0 | $9,112 | | Europe | $0 | $41,712 | $0 | $118,715 | | Total | $0 | $49,278 | $0 | $142,827 | NOTE 8. NOTES AND CONVERTIBLE NOTES PAYABLE This note details various outstanding debt instruments, including terms, interest rates, conversions, and extinguishments Debt Instrument Balances | Debt Instrument | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Indigo Capital Convertible Notes | $6,262,378 | — | | Liqueous Obligation | $1,053,824 | $1,053,824 | | TAG Promissory Note | $545,000 | — | | Agile Note | $874,560 | — | | Diagonal Convertible Note | $393,220 | — | | Boot Convertible Note | $189,961 | — | | Brick Lane Convertible Notes | $270,839 | — | | Bomore Convertible Notes | $1,383,639 | — | | Torcross Convertible Note | $135,420 | — | | Junior Notes Issued November 2023 | — | $2,369,122 | | August 2024 Convertible Notes | — | $537,375 | | Additional August 2024 Convertible Notes | — | $687,315 | | Senior Convertible Notes Issued June 2023 | — | $4,683,069 | | Current portion of notes payable | $11,108,841 | $9,242,183 | - During the six months ended June 30, 2025, the Company fully extinguished its Junior Notes and Senior Convertible Notes through conversions and a foreclosure process, resulting in a $8,961,872 discharge of indebtedness and a $1,682,641 loss on extinguishment for Senior Convertible Notes[105][107][123][125] - The Company issued several new convertible notes in Q1 and Q2 2025 (Indigo Capital, Agile, Diagonal, Boot, Brick Lane, Bomore, Torcross), many of which are accounted for at fair value due to embedded derivatives[129][136][144][150][155][160][169][178] - A $1,053,824 Liqueous Obligation was agreed to be settled through the issuance of 9,090,959 shares of Common Stock, which were not yet issued as of June 30, 2025[127] NOTE 9. CONVERTIBLE PREFERRED STOCK This note details Series A Preferred Stock, including its reclassification to a current liability and resulting interest expense - As of June 30, 2025, 2,188,905 shares of Preferred Stock were outstanding, reduced from 2,388,905 at December 31, 2024, due to purchases by Brick Lane and Bomore in exchange for convertible notes[187][188] - On January 31, 2025, the Preferred Stock was reclassified from mezzanine equity to a current liability of $23,889,050 because the conversion price exceeded the VWAP, triggering mandatory redemption[195] - The reclassification and subsequent remeasurement of the preferred stock liability resulted in a non-cash interest expense of $10,398,050 for the six months ended June 30, 2025[195][314][351] NOTE 10. WARRANTS This note summarizes outstanding warrants, categorizing them as liability-classified and equity-classified, detailing their terms Warrant Summary | Warrant Type | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Liability-classified warrants: | | | | Junior Note Warrants | 859,315 | 859,315 | | Public Warrants | 417,770 | 417,770 | | Total liability-classified warrants | 1,277,085 | 1,277,085 | | Equity-classified warrants: | | | | June 2023 Senior Note Warrants | 335,210 | 335,210 | | Pre-Funded Warrants | — | 837,116 | | August 2024 Warrants Issued with Junior Notes | 19,892 | 19,892 | | Total equity-classified warrants | 355,102 | 1,192,218 | - Public Warrants were delisted by NYSE American in December 2023 due to 'abnormally low' trading prices and were determined to have no value as of June 30, 2025[201] - Pre-Funded Warrants were modified in February 2025 as part of the Liqueous Settlement Agreement, leading to the exercise of 13,008,304 shares of Common Stock for no additional cash consideration[208][210] NOTE 11. STANDBY EQUITY PURCHASE AGREEMENT This note details the SEPA with YA II PN, LTD, allowing the company to sell up to $100 million of Common Stock - The Company entered into a SEPA with YA II PN, LTD to sell up to $100 million of Common Stock at its option over 36 months, with shares purchased at 97% of the lowest daily VWAP during a three-day period[212][214] - The SEPA is accounted for as a liability at fair value, including an embedded put option and forward contract, with the put option's fair value estimated at $2,831,504 as of June 30, 2025[221] - A commitment fee of $1,000,000 (1% of Commitment Amount) is payable in Common Stock, with 50% issued during Q2 2025 (1,332,623 shares) and the remainder due 90 days after execution[222] - Stockholder approval was obtained on July 9, 2025, to issue shares in excess of the 19.99% SEPA Share Cap[216] NOTE 12. STOCK-BASED COMPENSATION This note details stock-based compensation plans, including expense breakdown, RSU/option activity, and stock for services Stock-Based Compensation Expense | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $0 | $119,880 | $105,734 | $245,512 | | Research and development | $0 | $126,864 | $93,425 | $265,914 | | Selling and marketing | $6,381 | $(280,124) | $202,869 | $(199,199) | | General and administrative | $291,101 | $483,952 | $392,618 | $752,460 | | Total stock-based compensation expense | $297,482 | $450,572 | $794,646 | $1,064,687 | - Total stock-based compensation expense for the six months ended June 30, 2025, was $794,646, a decrease from $1,064,687 in the prior year, primarily due to employee furloughs and cost reduction measures[226][333][334][336] - The Company issued 3,830,189 shares of Common Stock for services during Q2 2025, with a portion classified as equity and another as liability, based on service provision[234] NOTE 13. INCOME TAX This note states zero income tax expense due to operating losses and a full valuation allowance against deferred tax assets - The Company recorded zero income tax expense for the three and six months ended June 30, 2025 and 2024, due to operating losses[239] - A full valuation allowance is maintained against deferred tax assets, including NOL carryforwards, as management concluded their realization is not probable[240] - A Section 382 ownership change occurred in 2023, which may limit the future utilization of NOL carryforwards, though this does not affect current results due to the full valuation allowance[241] NOTE 14. NET LOSS PER SHARE This note details the calculation of basic and diluted net loss per common share, excluding anti-dilutive securities - Contingently issuable shares, such as those from the SEPA, are excluded from basic EPS unless all specified contingencies (other than time) are satisfied[243] - Diluted EPS excludes common stock equivalents (e.g., stock options, warrants, convertible notes) when their inclusion would be anti-dilutive or decrease the reported loss per share[244] Potentially Dilutive Securities | Potentially Dilutive Securities | Three and Six Months Ended June 30, 2025 | Three and Six Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Stock options outstanding | 135,511 | 191,139 | | Junior Note Warrants | 859,315 | 550,000 | | Public Warrants | 417,770 | 417,770 | | June 2023 Senior Note Warrants | 335,210 | 335,210 | | August 2024 Warrants Issued with Junior Notes | 19,892 | — | | Pre-funded warrants | — | 171,706 | | Unvested restricted stock units | 2,418 | 10,275 | | If-converted Common Stock from Series A Preferred Stock | 109,445 | 119,445 | | If-converted Common Stock from convertible notes | 23,297,870 | 265,042 | | Total | 25,177,431 | 2,060,587 | NOTE 15. SEGMENT REPORTING This note states the company operates as a single reportable segment focused on high-power blue laser technology - The Company operates as a single reportable segment focused on high-power, high-brightness blue laser technology[246] - The Chief Operating Decision Maker (CODM) uses net loss, as reported in the consolidated statements of operations, to evaluate segment performance[247] NOTE 16. SUBSEQUENT EVENTS This note discloses significant events after June 30, 2025, including stockholder approvals and new debt issuances - On July 9, 2025, stockholders approved increasing authorized Common Stock to 900,000,000 shares, reverse stock splits, and the issuance of shares under the Indigo Capital Convertible Notes and SEPA in excess of the 19.99% Share Cap[249] - The Company issued new convertible notes to Indigo Capital ($150,000) on July 16, 2025, and Diagonal ($172,700 face amount) on July 21, 2025[250][251] - On July 17, 2025, the Company agreed to settle $5,662,479 in claims with Silverback Capital Corporation through the issuance of Common Stock, subject to court approval, which was granted on July 30, 2025[255] - NYSE American accepted the Company's Compliance Plan on July 22, 2025, granting a plan period through October 29, 2026, to regain compliance with listing standards[256] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, liquidity, and capital resources, highlighting ongoing losses Overview The company has not achieved commercialization, incurs significant losses, and relies on investor capital for operations - Nuburu has not achieved commercialization and expects continued losses, relying on capital from investors to support operations[263][266] - Cost reduction measures, including employee furloughs, have been implemented due to insufficient funding, leading to resignations of key employees[263] Financial Performance Overview | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $0 | $49,278 | $0 | $142,827 | | Net Loss | $(12,224,975) | $(12,638,883) | $(28,836,400) | $(18,343,981) | Recent Developments and Financing Transactions This section details recent significant events and financing activities, including asset impairment and new debt agreements - Assets (inventory, property, equipment, right-of-use asset) were fully impaired in Q1 2025 due to a lease default and landlord judgment[267] - NYSE American accepted the Company's Compliance Plan by October 29, 2026, to address non-compliance with listing standards[269] - The Company entered into a SEPA with YA II PN, LTD for up to $100 million in Common Stock sales, with stockholder approval for issuances exceeding the 19.99% share cap obtained in July 2025[280] - A convertible facility with Supply@ME Capital Plc (SYME) for up to $5.15 million was initiated, with $650,000 funded by June 30, 2025[285][286] - The Liqueous Settlement Agreement provided $1.45 million in payments and involved modifications to pre-funded warrants and the extinguishment of the Liqueous Obligation through Common Stock issuance[287][288] Components of Statements of Operations This section defines key components of the statements of operations, including revenue, expenses, and non-operating items - Revenue is recognized from sales and installation services of high-powered lasers, with no revenue reported for the current periods due to cost reduction measures[293][315][331] - Operating expenses (R&D, selling & marketing, G&A) are expected to increase as the company scales and operates as a public entity, despite recent cost reduction efforts[297][298][299] - Non-operating items include significant non-cash gains/losses from changes in fair value of warrant liabilities, derivative liabilities, convertible note receivable, notes payable, and SEPA liability, as well as losses on issuance and extinguishment of debt[302][303][304][305][306][307][308][309] - A $8,961,872 gain on sale of intellectual property intangible assets was recorded from the foreclosure collateral sale, while a $6,064,823 loss on impairment of inventories, property and equipment, and operating lease right-of-use asset was recognized[312][313] Results of Operations (Three Months Ended June 30, 2025 and 2024) For Q2 2025, the company reported no revenue and a net loss of $(12.2) million, with mixed changes in operating expenses Three Months Ended June 30, 2025 vs 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Revenue | $0 | $49,278 | $(49,278) | | Cost of revenue | $(4,538) | $733,726 | $(738,264) | | Gross margin | $4,538 | $(684,448) | $688,986 | | Research and development | $0 | $683,381 | $(683,381) | | Selling and marketing | $526,996 | $(73,070) | $600,066 | | General and administrative | $4,095,229 | $1,940,448 | $2,154,781 | | Loss from operations | $(4,617,687) | $(3,235,207) | $(1,382,480) | | Net loss | $(12,224,975) | $(12,638,883) | $413,908 | - Revenue decreased by $49,278 to nil, and cost of revenue decreased by $738,264, primarily due to reduced production and employee furloughs[315][316] - General and administrative expenses increased by $2,154,781, driven by higher accounting, audit, professional, consulting, and acquisition-related expenses[320] - Significant non-operating losses included a $1,422,895 loss from change in fair value of notes payable, a $2,582,724 loss on issuance of SEPA, and a $1,375,819 loss on extinguishment of notes payable[324][327][328] Results of Operations (Six Months Ended June 30, 2025 and 2024) For H1 2025, the company reported no revenue and a net loss of $(28.8) million, impacted by impairment and remeasurement losses Six Months Ended June 30, 2025 vs 2024 | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | | :----------------------------------- | :----------------------------- | :----------------------------- | :--------- | | Revenue | $0 | $142,827 | $(142,827) | | Cost of revenue | $231,179 | $1,590,682 | $(1,359,503) | | Gross margin | $(231,179) | $(1,447,855) | $1,216,676 | | Research and development | $184,563 | $1,449,876 | $(1,265,313) | | Selling and marketing | $1,070,333 | $272,520 | $797,813 | | General and administrative | $6,174,034 | $4,593,243 | $1,580,791 | | Loss from operations | $(7,660,109) | $(7,763,494) | $103,385 | | Net loss | $(28,836,400) | $(18,343,981) | $(10,492,419) | - Net loss increased by $10,492,419, primarily due to a $10,398,050 interest expense from preferred stock liability remeasurement and a $6,064,823 loss on asset impairment, partially offset by an $8,961,872 gain on intellectual property sale[331][349][350][351] - Cost of revenue decreased by $1,359,503, and R&D expenses decreased by $1,265,313, both driven by cost reduction measures and employee furloughs[332][333] - Selling and marketing expenses increased by $797,813, mainly due to higher professional/consulting fees and stock-based compensation, while general and administrative expenses rose by $1,580,791 due to increased accounting, audit, and acquisition-related costs[334][336] Liquidity and Capital Resources The company faces significant liquidity challenges, with limited cash and ongoing losses, raising going concern doubts - As of June 30, 2025, cash and cash equivalents were $111,090, down from $209,337 at December 31, 2024[353] - The company has incurred operating losses and negative cash flows, with an accumulated deficit of $150,244,955, raising substantial doubt about its ability to continue as a going concern[354][355] - Future operations and expansion require significant cash, and the company will rely on private and public capital raising efforts, with no assurance of favorable terms or success[356][357][358] Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,986,504) | $(4,322,227) | | Net cash used in investing activities | $(1,250,000) | $0 | | Net cash provided by financing activities | $5,138,257 | $2,290,715 | Key Operating and Financial Metrics (Non-GAAP Results) This section presents key operating and financial metrics, including non-GAAP measures like EBITDA and Free Cash Flow Non-GAAP Financial Metrics | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $0 | $49,278 | $0 | $142,827 | | Total gross margin | $4,538 | $(684,448) | $(231,179) | $(1,447,855) | | EBITDA | $(12,083,217) | $(11,395,028) | $(28,062,098) | $(15,663,109) | | Free cash flow | $(2,058,712) | $(2,228,785) | $(4,586,504) | $(4,322,227) | - EBITDA for the six months ended June 30, 2025, was $(28,062,098), a significant increase in loss from $(15,663,109) in the prior year[370] - Free cash flow for the six months ended June 30, 2025, was $(4,586,504), indicating continued cash burn[370] - Non-GAAP measures like EBITDA and Free Cash Flow have limitations, as they exclude certain non-cash charges, interest expense, and impacts of financing activities, and should not be considered substitutes for GAAP results[373] Off-Balance Sheet Arrangements The company reported no off-balance sheet arrangements as of June 30, 2025 - The Company had no off-balance sheet arrangements as of June 30, 2025[376] Contractual Obligations Information regarding contractual obligations that impact liquidity and cash flow is referenced to Note 6 of the condensed consolidated financial statements - Contractual obligations affecting liquidity and cash flow are detailed in Note 6 of the condensed consolidated financial statements[377] Critical Accounting Estimates The financial statements rely on estimates and assumptions, with no significant changes to critical accounting policies - The condensed consolidated financial statements are prepared using estimates and assumptions in accordance with U.S. GAAP[378] - No significant changes to critical accounting policies occurred during the six months ended June 30, 2025[379] Recently Issued and Adopted Accounting Pronouncements Information on recently issued and adopted accounting pronouncements that may impact the condensed consolidated financial statements is referenced to Note 2 - Details on recently issued and adopted accounting pronouncements are provided in Note 2 of the condensed consolidated financial statements[382] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Nuburu, Inc. is not required to provide market risk disclosures - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[383] Item 4. Controls and Procedures Disclosure controls were ineffective due to a material weakness in the control environment for complex financial instruments - Disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in the control environment concerning complex financial instrument transactions[385] - Planned remediation efforts include hiring additional qualified personnel and adopting sufficient written policies and procedures, but these are contingent on securing additional financing[386] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the period[388] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, and exhibits related to the company's operations Item 1. Legal Proceedings Information regarding legal proceedings is incorporated by reference from the 'Commitments and Contingencies' section in Note 6 of the unaudited condensed consolidated financial statements - Legal proceedings information is incorporated by reference from Note 6 of the financial statements[390] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024[391] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Descriptions of unregistered equity sales and use of proceeds are incorporated by reference from Item 2 and Notes 8 and 12 - Information on unregistered sales of equity securities and use of proceeds is incorporated by reference from Item 2 and Notes 8 and 12 of the financial statements[392] - Such transactions were conducted as private placements to accredited investors, exempt from registration under Section 4(a)(2) of the Securities Act[392] Item 3. Defaults Upon Senior Securities Information regarding defaults upon senior securities is referenced to Note 8 of the condensed consolidated financial statements - Information on defaults upon senior securities is referenced to Note 8[393] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[396] Item 5. Other Information This item is not applicable to the company - This item is not applicable[397] Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q - The report includes a comprehensive list of exhibits, such as the Business Combination Agreement, Amended and Restated Bylaws, Certificate of Designations, and various Securities Purchase Agreements and Exchange Agreements related to recent financing activities[399][400][403] SIGNATURES This section contains the required signatures for the Quarterly Report on Form 10-Q, certifying its submission SIGNATURES This section contains the required signatures for the Quarterly Report on Form 10-Q, certifying its submission - The report is signed by Alessandro Zamboni, Executive Chairman, who also holds the titles of Principal Executive Officer and Principal Financial and Accounting Officer[406]