# EDGAR Filing Document

**Accession Number:** 0001814215
**File Stem:** 0000950170-25-093986
**Filing Date:** 2025-7
**Character Count:** 216606
**Document Hash:** 0caf75c7e94b7599e34926a192de5c62
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-25-093986.hdr.sgml**: 20250703

**ACCESSION NUMBER**: 0000950170-25-093986

**CONFORMED SUBMISSION TYPE**: 10-Q/A

**PUBLIC DOCUMENT COUNT**: 91

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250703

**DATE AS OF CHANGE**: 20250703

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Nuburu, Inc.
- **CENTRAL INDEX KEY:** 0001814215
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39489
- **FILM NUMBER:** 251106307

**BUSINESS ADDRESS:**
- **STREET 1:** 7442 S TUSCON WAY
- **STREET 2:** SUITE 130
- **CITY:** CENTENNIAL
- **STATE:** CO
- **ZIP:** 80112
- **BUSINESS PHONE:** (720) 767-1400

**MAIL ADDRESS:**
- **STREET 1:** 7442 S TUSCON WAY
- **STREET 2:** SUITE 130
- **CITY:** CENTENNIAL
- **STATE:** CO
- **ZIP:** 80112

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Tailwind Acquisition Corp.
- **DATE OF NAME CHANGE:** 20200604

?xml version='1.0' encoding='ASCII'? 10-Q/A

[**<u>**Table of Contents**</u>**](#toc_page)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

------

**FORM** 10-Q/A

------

**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the quarterly period ended** **March 31,** 2025

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from to** 

**Commission File Number:** 001-39489

------

NUBURU, INC.

**(Exact Name of Registrant as Specified in its Charter)**

------

---

| | |
|:---|:---|
| Delaware | 85-1288435 |
| **(State or other jurisdiction of**<br>**incorporation or organization)** | **(I.R.S. Employer**<br>**Identification No.)** |
| 7442 S Tucson Way**,** Suite 130**,**<br>Centennial**,** CO | 80112 |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**Registrant's telephone number, including area code: (**720**)** 767-1400

------

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br>**Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.0001 per share | BURU | NYSE American |

---

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☐ |
| Non-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 in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 15, 2025, the registrant had 52,443,348 shares of common stock, $0.0001 par value per share, outstanding.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**EXPLANATORY NOTE**

Nuburu, Inc. (referred to herein as the "Company," "Nuburu," "we," "us," or "our") is filing this Amendment No. 1 on Form 10-Q (this "Amendment No. 1") to amend our Quarterly Report on Form 10-Q for the three ended March 31, 2025 initially filed with the Securities and Exchange Commission (the "SEC") on May 20, 2025 ("Original 10-Q").

**Background of Restatement**

The purpose of this Amendment No. 1 is to restate amounts included in the Company's previously issued financial statements as of and for the three months ended March 31, 2025 to correct misstatements for (i) certain assumptions used to calculate the fair value of the Indigo Capital Convertible Notes, as defined and described in Note 8 to the condensed consolidated financial statements, accounted for under the fair value option that were not appropriate and (ii) the fair value of the Indigo Capital Convertible Notes that was not adjusted to fair value upon conversion into shares of common stock.

The restatement had no impact on total net cash flows from operating, investing or financing activities.

For additional information related to the restatement, see Note 15, "*Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements*" of the condensed consolidated financial statements. Additionally, Item 2, "*Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources*" included in this Amendment No. 1 on Form 10-Q/A is being amended to reflect the effect of the restatement described above.

The Company has attached to this Form 10-Q/A updated certifications executed as of the date of this Amendment No. 1 by the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes Oxley Act of 2002. These updated certifications are attached as Exhibits 31.1 and 32.1 to this Amendment.

**Internal Control Considerations**

In connection with the restatement, our management has assessed the effectiveness of our internal control over financial reporting. The Audit Committee of the Company's Board of Directors, with concurrence of management, has concluded that, in light of the errors described above, a material weakness existed in the Company's internal controls over financial reporting as of March 31, 2025. Management plans to enhance processes by increasing the number of accounting professionals with the necessary skill sets, providing ongoing training for key personnel, and designing and implementing appropriate risk assessment and internal control procedures. For a discussion of management's consideration of our disclosure controls and procedures, internal controls over financial reporting and the material weakness identified, see *Item 4. Controls and Procedures* of this Amendment No. 1 on Form 10-Q/A.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NUBURU, INC.**

**FORM 10-Q**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| [<u>PART I – INTERIM FINANCIAL INFORMATION</u>](#part_1_financial_information) | [<u>PART I – INTERIM FINANCIAL INFORMATION</u>](#part_1_financial_information) |  |
|  | [<u>Cautionary Note Regarding Forward-looking Statements</u>](#special_note_regarding_forward) | 3 |
| [<u>Item 1.</u>](#item_1_condensed_consolidated_financial) | [<u>Unaudited Condensed Consolidated Financial Statements</u>](#item_1_condensed_consolidated_financial) | 5 |
|  | [<u>Condensed Consolidated Balance Sheets</u>](#condensed_consolidated_balance_sheets) | 5 |
|  | [<u>Condensed Consolidated Statements of Operations</u>](#condensed_consolidated_statements_of_ope) | 6 |
|  | [<u>Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit</u>](#condensed_consolidated_statements_of_cha) | 7 |
|  | [<u>Condensed Consolidated Statements of Cash Flows</u>](#condensed_consolidated_statements_of_cas) | 8 |
|  | [<u>Notes to Condensed Consolidated Financial Statements</u>](#notes_to_condensed_consolidated_financia) | 9 |
| [<u>Item 2.</u>](#item_2_managements_discussion_and_analys) | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_2_managements_discussion_and_analys) | 30 |
| [<u>Item 3.</u>](#item_3_quantitative_and_qualitative) | [<u>Quantitative and Qualitative Disclosures about Market Risk</u>](#item_3_quantitative_and_qualitative) | 39 |
| [<u>Item 4.</u>](#item_4_control_and_procedures) | [<u>Controls and Procedures</u>](#item_4_control_and_procedures) | 39 |
| [<u>PART II – OTHER INFORMATION</u>](#part_ii_other_information) | [<u>PART II – OTHER INFORMATION</u>](#part_ii_other_information) | 39 |
| [<u>Item 1.</u>](#item_1_legal_proceedings) | [<u>Legal Proceedings</u>](#item_1_legal_proceedings) | 39 |
| [<u>Item 1A.</u>](#item_1a_risk_factors) | [<u>Risk Factors</u>](#item_1a_risk_factors) | 39 |
| [<u>Item 2.</u>](#item_2_unregistered_sales_of_equity) | [<u>Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities</u>](#item_2_unregistered_sales_of_equity) | 40 |
| [<u>Item 3.</u>](#item_3_defaults_upon_senior_securities) | [<u>Defaults Upon Senior Securities</u>](#item_3_defaults_upon_senior_securities) | 40 |
| [<u>Item 4.</u>](#item_4_mine_safety_disclosures) | [<u>Mine Safety Disclosures</u>](#item_4_mine_safety_disclosures) | 40 |
| [<u>Item 5.</u>](#item_5_other_information) | [<u>Other Information</u>](#item_5_other_information) | 40 |
| [<u>Item 6.</u>](#item_6_exhibits) | [<u>Exhibits</u>](#item_6_exhibits) | 41 |
| [<u>SIGNATURES</u>](#signatures) |  | 42 |

---

------

[**<u>**Table of Contents**</u>**](#toc_page)

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q (this "Quarterly Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which statements involve substantial risk and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to obtain required financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to maintain the listing of our common stock, par value of $0.0001 per share (the "Common Stock") on a securities exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to successfully implement key acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our success in retaining or recruiting, or changes required in, our officers, key employees, or directors, including the transition to a new management team in the first half of 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our public securities' potential liquidity and trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to implement our announced business plan, including diversifying our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the fact that we have not achieved commercialization and our ability to achieve commercialization in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the outcome of any legal proceedings that may be instituted against us related to the Business Combination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•existing regulations and regulatory developments in the United States and other jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the need to hire additional personnel and our ability to attract and retain such personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our plans and ability to obtain, maintain, enforce, or protect intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our business, operations and financial performance, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expectations with respect to financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expectations regarding future acquisitions, partnerships, or other relationships with third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•future business plans and growth opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expectations regarding product development and pipeline;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expectations regarding research and development efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expectations regarding market size;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expectations regarding the competitive landscape; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•future capital requirements and sources and uses of cash, including the ability to obtain additional capital in the future.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors under the heading "Risk Factors" in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended (our "Annual Report"), as well as the following important factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to obtain financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to meet NYSE American's continued listing standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to protect our intellectual property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•whether the market embraces our products and investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•whether we achieve commercialization in a timely manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the outcome of any legal proceedings that may be instituted against us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to retain or recruit key employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs related to being a public company;

------

[**<u>**Table of Contents**</u>**](#toc_page)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in applicable laws or regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the possibility that we may be adversely affected by economic, business, or competitive factors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•volatility in the markets caused by geopolitical and economic factors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•other risks and uncertainties set forth in the section titled "Risk Factors" and in other sections of our Annual Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•other risks and uncertainties set forth under the heading "Risk Factors" in Part II, Item 1A and elsewhere in this Quarterly Report.

Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**PART 1 – FINANCIAL INFORMATION**

**Item 1. Condensed Consolidated Financial Statements**

**NUBURU, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
|  | **(Unaudited)** |  |
|  | **(As Restated)** |  |
| **ASSETS** |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $70937 | $209337 |
| &nbsp;&nbsp;Inventories, net of reserve of $0 and $1,161,469 at March 31, 2025 and December 31, 2024, respectively |  | 1526467 |
| &nbsp;&nbsp;Deposit on acquisition - related party | 600000 |  |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 380536 | 162749 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1051473 | 1898553 |
| Property and equipment, net |  | 4834729 |
| Operating lease right-of-use assets |  | 202411 |
| Convertible note receivable | 260000 |  |
| Other assets |  | 34359 |
| TOTAL ASSETS | $1311473 | $6970052 |
| **LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;Accounts payable | $6206910 | $6301310 |
| &nbsp;&nbsp;Accrued expenses | 4302642 | 4301195 |
| &nbsp;&nbsp;Current portion of operating lease liability | 119720 | 237369 |
| &nbsp;&nbsp;Contract liabilities | 24000 | 24000 |
| &nbsp;&nbsp;Shareholder advances | 99936 | 644936 |
| &nbsp;&nbsp;Current portion of notes payable | 5645824 | 9242183 |
| &nbsp;&nbsp;Convertible note derivative liability |  | 37900 |
| &nbsp;&nbsp;Preferred stock liability | 23889050 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 40288082 | 20788893 |
| Warrant liabilities | 1315 | 128615 |
| TOTAL LIABILITIES | 40289397 | 20917508 |
| Commitments and Contingencies (Note 6) |  |  |
| Convertible preferred stock, $0.0001 par value; 50,000,000 shares authorized; 2,388,905 shares issued and outstanding at December 31, 2024 |  | 23889050 |
| Stockholders' Deficit |  |  |
| Common stock, $0.0001 par value; 250,000,000 shares authorized; 48,833,664 and 20,274,238 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 8767 | 2028 |
| Additional paid-in capital | 99033289 | 93968071 |
| Accumulated deficit | (138019980) | (131806605) |
| Total Stockholders' Deficit | (38977924) | (37836506) |
| TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | $1311473 | $6970052 |

---

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NUBURU, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
|  | **2025** | **2024** |
|  | **(As Restated)** |  |
| Revenue | $— | $93549 |
| Cost of revenue | 235717 | 856956 |
| Gross margin | (235717) | (763407) |
| Operating expenses: |  |  |
| &nbsp;&nbsp;Research and development | 184563 | 766495 |
| &nbsp;&nbsp;Selling and marketing | 543337 | 345590 |
| &nbsp;&nbsp;General and administrative | 2078805 | 2652795 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 2806705 | 3764880 |
| Loss from operations | (3042422) | (4528287) |
| Non-operating expenses: |  |  |
| &nbsp;&nbsp;Interest income | 7385 | 11740 |
| &nbsp;&nbsp;Interest expense | (193480) | (1191862) |
| &nbsp;&nbsp;Change in fair value of warrant liabilities | 127300 | 3311 |
| &nbsp;&nbsp;Change in fair value of derivative liability | 37900 |  |
| &nbsp;&nbsp;Change in fair value of debt | 256522 |  |
| &nbsp;&nbsp;Loss on issuance of debt | (707800) |  |
| &nbsp;&nbsp;Loss on extinguishment of debt | (5497516) |  |
| &nbsp;&nbsp;Gain on sale of intellectual property intangible assets | 8961872 |  |
| &nbsp;&nbsp;Loss on impairment of inventories, property and equipment and operating lease right-of-use asset | (6064823) |  |
| &nbsp;&nbsp;Interest expense recognized on remeasurement of preferred stock liability | (10398050) |  |
| &nbsp;&nbsp;Other loss, net | (98313) |  |
| &nbsp;&nbsp;Loss before provision for income taxes | $(16611425) | $(5705098) |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for income taxes |  |  |
| Net loss | (16611425) | $(5705098) |
| Reclassification of convertible preferred stock from mezzanine equity to liability | 10398050 |  |
| Deemed dividend in connection with modification of pre-funded warrants | (3076380) |  |
| &nbsp;&nbsp;Net loss available to common shareholders | $(9289755) | $(5705098) |
| Net loss per common share, basic and diluted <sup>(1)</sup> | $(0.28) | $(6.18) |
| Weighted-average common shares used to compute net loss per common share, basic and diluted <sup>(1)(2)</sup> | 33074691 | 922894 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Periods presented have been adjusted to reflect the 1-for-40 reverse stock split on July 23, 2024. See Note 2 – Summary of Significant Accounting Policies for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Amount presented for the three months ended March 31, 2025 includes 3,831,229 shares of common stock that the Company was required to issue but had not yet issued as of March 31, 2025.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NUBURU, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT**

**(UNAUDITED) (As Restated)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Convertible<br>Preferred Stock** | **Convertible<br>Preferred Stock** | **Common Stock** | **Common Stock** |  |  |  |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Deficit** | **Total<br>Stockholders'<br>Deficit** |
| Balance as of December 31, 2024 | 2388905 | $23889050 | 20274238 | $2028 | $93968071 | $(131806605) | $(37836506) |
| Reclassification of convertible preferred stock from mezzanine equity to current liabilities | (2388905) | (23889050) |  |  |  |  |  |
| Issuance of Common Stock to extinguish debt |  |  | 15551122 | 5438 | 4384813 |  | 4390251 |
| Issuance of Common Stock upon exercise of pre-funded warrants |  |  | 13008304 | 1301 | (367) |  | 934 |
| Contributions from related party |  |  |  |  | 110000 |  | 110000 |
| Stock-based compensation |  |  |  |  | 571708 |  | 571708 |
| Deemed dividend in connection with modification of pre-funded warrants |  |  |  |  | (936) |  | (936) |
| Reclassification of convertible preferred stock from mezzanine equity to liability |  |  |  |  |  | 10398050 | 10398050 |
| Net loss |  |  |  |  |  | (16611425) | (16611425) |
| Balance as of March 31, 2025 |  | $— | 48833664 | $8767 | $99033289 | $(138019980) | $(38977924) |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Convertible<br>Preferred Stock** | **Convertible<br>Preferred Stock** | **Common Stock** | **Common Stock** |  |  |  |
|  | **Shares**<sup>(1)</sup> | **Amount** | **Shares**<sup>(1)</sup> | **Amount**<sup>(1)</sup> | **Additional<br>Paid-in<br>Capital**<sup>(1)</sup> | **Accumulated<br>Deficit** | **Total<br>Stockholders'<br>Deficit** |
| Balance as of December 31, 2023 | 2388905 | $23889050 | 922362 | $92 | $64744838 | $(97290851) | $(32545921) |
| Issuance of Common Stock |  |  | 40000 | 4 | 199996 |  | 200000 |
| Issuance of Common Stock from releases of restricted units |  |  | 1237 | 1 | (1) |  |  |
| Restricted stock units used for tax withholdings |  |  | (285) | (1) | (1872) |  | (1873) |
| Stock-based compensation |  |  |  |  | 614115 |  | 614115 |
| Net loss |  |  |  |  |  | (5705098) | (5705098) |
| Balance as of March 31, 2024 | 2388905 | $23889050 | 963314 | $96 | $65557076 | $(102991887) | $(37434715) |

---

(1) Periods presented have been adjusted to reflect the 1-for-40 reverse stock split on July 23, 2024. See Note 2 – Summary of Significant Accounting Policies for additional information.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NUBURU, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
|  | **2025** | **2024** |
|  | **(As Restated)** |  |
| Cash Flows from Operating Activities: |  |  |
| Net loss | $(16611425) | $(5705098) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 446449 | 256895 |
| &nbsp;&nbsp;Stock-based compensation | 497164 | 614115 |
| &nbsp;&nbsp;Inventory reserve adjustments |  | 28012 |
| &nbsp;&nbsp;Amortization of debt discount |  | 789871 |
| &nbsp;&nbsp;Amortization of deferred financing costs | 28433 | 236550 |
| &nbsp;&nbsp;Operating lease right-of-use asset |  | 93626 |
| &nbsp;&nbsp;Change in fair value of warrant liabilities | (127300) | (3311) |
| &nbsp;&nbsp;Change in fair value of derivative liability | (37900) |  |
| &nbsp;&nbsp;Change in fair value of debt | (256522) |  |
| &nbsp;&nbsp;Loss on issuance of debt | 707800 |  |
| &nbsp;&nbsp;Loss on extinguishment of debt | 5497516 |  |
| &nbsp;&nbsp;Gain on sale of intellectual property intangible assets | (8961872) |  |
| &nbsp;&nbsp;Loss on impairment of inventories, property and equipment and operating lease right-of-use asset | 6064823 |  |
| &nbsp;&nbsp;Interest expense recognized on remeasurement of preferred stock liability | 10398050 |  |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;Accounts receivable |  | 349657 |
| &nbsp;&nbsp;Inventories |  | (218542) |
| &nbsp;&nbsp;Prepaid expenses and other current assets | (42171) | 97295 |
| &nbsp;&nbsp;Accounts payable | (94398) | 952936 |
| &nbsp;&nbsp;Accrued expenses | 681210 | 524487 |
| &nbsp;&nbsp;Contract liabilities |  | (23400) |
| &nbsp;&nbsp;Operating lease liability | (117649) | (86535) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1927792) | (2093442) |
| Cash Flows from Investing Activities: |  |  |
| &nbsp;&nbsp;Payment for acquisition | (600000) |  |
| &nbsp;&nbsp;Payments under convertible note receivable | (150000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (750000) |  |
| Cash Flows from Financing Activities: |  |  |
| &nbsp;&nbsp;Proceeds from debt borrowings | 2394708 |  |
| &nbsp;&nbsp;Repayments of debt | (835316) |  |
| &nbsp;&nbsp;Payments of debt issuance costs and discounts | (20000) |  |
| &nbsp;&nbsp;Proceeds received from settlement | 1000000 |  |
| &nbsp;&nbsp;Proceeds from issuance of common stock |  | 200000 |
| &nbsp;&nbsp;Restricted stock units used for tax withholdings |  | (1873) |
| &nbsp;&nbsp;Payment of deferred financing costs |  | (21500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 2539392 | 176627 |
| NET CHANGE IN CASH DURING THE PERIOD | (138400) | (1916815) |
| CASH AND CASH EQUIVALENTS ―BEGINNING OF PERIOD | 209337 | 2148700 |
| CASH AND CASH EQUIVALENTS ―END OF PERIOD | 70937 | $231885 |
| SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Issuance of Common Stock upon extinguishment of debt | $4390251 | $— |
| &nbsp;&nbsp;Issuance of Common Stock upon exercise of pre-funded warrants | $934 | $— |
| &nbsp;&nbsp;Deemed dividend in connection with modification of pre-funded warrants | $936 | $— |
| &nbsp;&nbsp;Shareholder advance to promissory note | $545000 | $— |
| &nbsp;&nbsp;Conversion of debt to common stock | $306459 | $— |
| &nbsp;&nbsp;Initial fair value of convertible note receivable over proceeds paid | $110000 | $— |
| &nbsp;&nbsp;Transfer of property and equipment from inventory | $— | $68499 |
| &nbsp;&nbsp;Purchase of property and equipment in accounts payable and accrued expenses | $— | $540028 |
| &nbsp;&nbsp;Deferred financing costs included in accounts payable and accrued expenses | $— | $697563 |
| &nbsp;&nbsp;Transaction costs related to the reverse recapitalization not yet paid | $— | $1007439 |

---

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NUBURU, INC.** 

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** 

**(Unaudited)**

**NOTE 1. BACKGROUND AND ORGANIZATION**

Nuburu, Inc. ("Nuburu" or the "Company") was originally incorporated in Delaware on July 21, 2020 under the name Tailwind Acquisition Corp. ("Tailwind") as a special purpose acquisition company, formed for the purpose of effecting an initial business combination with one or more target businesses. On September 9, 2020 (the "IPO Closing Date"), the Company consummated its initial public offering (the "IPO"). On January 31, 2023 (the "Closing Date"), the Company consummated a business combination with Nuburu Subsidiary, Inc. f/k/a Nuburu, Inc. ("Legacy Nuburu"), a privately held operating company which merged into the Company's subsidiary Compass Merger Sub, Inc. (the "Business Combination") and changed its name to "Nuburu, Inc.," and the Company became the owner, directly or indirectly, of all of the equity interests of Nuburu Subsidiary, Inc. and its subsidiaries.

Throughout the notes to the condensed consolidated financial statements, unless otherwise noted, the "Company," "we," "us" or "our" and similar terms refer to Legacy Nuburu prior to the consummation of the Business Combination, and Nuburu and its subsidiaries after the consummation of the Business Combination.

**Going Concern and Liquidity**

The Company is an emerging growth company that has not yet achieved full commercialization and is expected to incur losses until it does.

From inception through March 31, 2025, the Company has incurred operating losses and negative cash flows from operating activities. For the three months ended March 31, 2025 and 2024, the Company has incurred operating losses, including net losses of $16,611,425 and $5,705,098, respectively, and the Company has an accumulated deficit of $138,019,980 as of March 31, 2025. The operating loss for the three months ended March 31, 2025 included $10,398,050 of non-cash interest expense recognized on remeasurement of preferred stock liability. For additional information on this interest expense see Note 9. The Company expects to continue executing its comprehensive growth and diversification strategy, expanding into complementary domains such as defense-tech, security, and operational resilience solutions. The Company anticipates that it will incur net losses for the foreseeable future and, even if it increases its revenue, there is no guarantee that it will ever become profitable. All of the aforementioned factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company plans to finance its operations with proceeds from the issuance and sale of equity securities or debt; however, there is no assurance that management's plans to obtain additional debt or equity financing will be successfully implemented or implemented on terms favorable to the Company. Until the Company can generate sufficient revenue to cover its operating expenses, working capital, and capital expenditures, the Company plans to rely on proceeds received from certain agreements executed subsequent to March 31, 2025, as further described herein.

**Inventory, Property and Equipment and Right-of-Use Asset Impairment**

The Company leases approximately 27,900 square feet of office space in Centennial, Colorado, with a lease term through June 2025. Consistent with the Company's previously disclosed business plan for its future business, the Company does not believe that assets or equipment that remain on this leased property are critical to its new business strategy, given that it will not be conducting full-scale manufacturing or laser design or development that would involve the prior patent portfolio, which was transferred to its former secured lenders. The Company is pursuing a lease for a replacement facility that is more appropriate for the Company's new business strategy, which will involve laser development in different verticals and outsourcing of manufacturing and inventory management. However, entering into a new lease and appropriately equipping a new facility is costly and time-consuming and may cause delays in the Company's progress with respect to the business plan focused on building a stable foundation for its future business.

As of March 31, 2025, the Company was in default under the lease, and Centennial Tech Industrial Owner (the "Landlord") was in the process of pursuing available remedies in advance of the lease term that would otherwise expire in June 2025. In April 2025, the Landlord obtained a default judgment against the Company in the amount of $409,278. The Landlord may exercise rights under the lease agreement and applicable law with respect to a lessee in default and such lessee's assets located on the premises, including the removal and disposal of inventories and property and equipment remaining on the property. As such, as of March 31, 2025, the Company determined that, based on the assumption that the Landlord would fully exercise its rights with respect to all assets remaining on the premises, (i) it no longer had control over the inventory and that recovery was not probable, therefore, inventory was written down to a net realizable value of zero, (ii) the carrying value of its property and equipment, all of which was at the leased location, was no longer recoverable, and the assets were written down to a net book value of $0, and (iii) the right-of-use asset associated with this lease was fully impaired, as the Company could no longer use the leased premises, each of which is recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

**Certain Significant Risks and Uncertainties**

The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, those summarized in the *Cautionary Note Regarding Forward-Looking Statements* above.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Presentation**

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented.

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any future period. These unaudited condensed consolidated financial statements and their notes should be read in conjunction with the Company's Annual Report on Form 10-K as filed with the SEC on April 15, 2025, and as subsequently amended.

**Principles of Consolidation**

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

**Reverse Stock Split**

Following stockholder approval on February 22, 2024, the Company effected a reverse stock split of its Common Stock at a ratio of 1-for-40 (the "Reverse Stock Split.") The Reverse Stock Split was effective July 23, 2024. No changes were made to the number of authorized shares. Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of the Company's equity awards, warrants, and other equity instruments convertible into Common Stock, as well as the applicable exercise price. All share and per share amounts of our Common Stock presented have been retroactively adjusted to reflect the Reverse Stock Split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital.

**Emerging Growth Company**

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

**Significant Accounting Policies**

The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended. Other than as noted below, the significant accounting policies have not changed significantly since that filing.

***Fair value option for certain financial instruments***

The Company elected the fair value option ("FVO") for recognition of the Convertible Note Receivable (as defined and described in Note 5, *Convertible Loan Receivable*), as permitted under Accounting Standards Codification ("ASC") 825, *Financial Instruments*. Under this option, financial instruments are initially recognized at fair value as an asset or liability on the condensed consolidated balance sheets with subsequent changes in fair value, inclusive of interest, market risk, and other factors affecting valuation, reflected in the condensed consolidated statements of operations. The Company elected to recognize interest expense within the line item presented for the change in the fair value of the asset or liability. Additionally, the change in fair value of financial liabilities attributable to the change in the instrument-specific credit risk is required to be presented separately in other comprehensive income. For the three months ended March 31, 2025, the change in fair value related to a change in the instrument-specific credit risk was immaterial. All costs associated with the issuance of financial instruments accounted for using the FVO are expensed upon issuance or as incurred. See Note 5, *Convertible Loan Receivable,* and Note 8, *Notes and Convertible Notes Payable,* for additional information.

***Mandatorily redeemable preferred stock***

The Company accounts for mandatorily redeemable preferred stock in accordance with ASC 480, *Distinguishing Liabilities from Equity*. Preferred stock that is mandatorily redeemable on a fixed or determinable date, or upon the occurrence of an event certain to occur, is classified as a liability on the condensed consolidated balance sheets. Mandatorily redeemable preferred stock is initially recognized at its fair value, and subsequently measured at its redemption value.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Recently Issued Accounting Pronouncements**

*ASU 2023-09*

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740)* – *Improvements to Income Tax Disclosures*. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The adoption of this guidance will result in the Company being required to include enhanced income tax related disclosures. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

*ASU 2024-03*

In November 2024, the FASB issued ASC 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. This new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is in the process of finalizing the disclosures that will be required by the adoption of the provisions of ASU 2023-09, and will adopt these amendments for annual disclosures in the Annual Report on Form 10-K for the year ending December 31, 2025.

**NOTE 3. BALANCE SHEET COMPONENTS**

As further described in Note 1, the Company was in default under its lease, and the Landlord was in the process of pursuing available remedies in advance of the lease term that would otherwise expire in June 2025. In April 2025, the Landlord obtained a default judgment against the Company in the amount of $409,278. The Landlord may exercise rights under the lease agreement and applicable law with respect to a lessee in default and such lessee's assets located on the premises, including the removal and disposal of inventories and property and equipment remaining on the property. As such, as of March 31, 2025, the Company determined that, based on the assumption that the Landlord would fully exercise its rights with respect to all assets remaining on the premises, (i) it no longer had control over the inventory and that recovery was not probable, therefore, inventory was written down to a net realizable value of zero, (ii) the carrying value of its property and equipment, all of which was at the leased location, was no longer recoverable, and the assets were written down to a net book value of zero, and (iii) the right-of-use asset associated with this lease was fully impaired, as the Company could no longer use the leased premises, each of which is recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

**Inventories, Net**

Inventories, net as of March 31, 2025 and December 31, 2024 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
| Raw materials and supplies | $— | $1913013 |
| Work-in-process |  | 161137 |
| Finished goods |  | 613786 |
| &nbsp;&nbsp;Inventories, gross |  | 2687936 |
| Less: inventory reserve |  | (1161469) |
| &nbsp;&nbsp;Inventories, net | $— | $1526467 |

---

During the three months ended March 31, 2025 and 2024, the Company recorded net lower of cost or net realizable value charges of nil and $28,012, respectively. As of March 31, 2025, in connection with the lease default described above, inventory was written down to a net realizable value of zero through a $1,526,467 loss recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

**Property and Equipment, Net**

Property and equipment, net as of March 31, 2025 and December 31, 2024 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
| Machinery and equipment | $7203592 | $7203592 |
| Leasehold improvements | 897948 | 897948 |
| Furniture and office equipment | 205897 | 205897 |
| Computer equipment and software | 197386 | 197386 |
| &nbsp;&nbsp;Property and equipment, gross | 8504823 | 8504823 |
| Less: accumulated depreciation and amortization | (4116543) | (3670094) |
| Less: impairment of property and equipment | (4388280) |  |
| &nbsp;&nbsp;Property and equipment, net | $— | $4834729 |

---

Depreciation and amortization expense related to property and equipment was $446,449 and $256,895 during the three months ended March 31, 2025 and 2024, respectively.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Prepaid Expenses and Other Current Assets**

Prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
| Prepaid insurance | $168063 | $123959 |
| Other prepaid assets | 160623 | 28521 |
| Other current assets | 51850 | 10269 |
| &nbsp;&nbsp;Total prepaid expenses and other current assets | $380536 | $162749 |

---

**Accrued Expenses**

Accrued expenses as of March 31, 2025 and December 31, 2024 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
| Accrued legal, accounting and professional fees | $2648037 | $2448594 |
| Accrued transaction costs related to the reverse recapitalization | 503599 | 503600 |
| Accrued payroll and benefits | 341956 | 357953 |
| Accrued lease-related payables | 289558 | 54288 |
| Accrued taxes payable | 269147 | 232966 |
| Accrued interest | 40325 | 560501 |
| Other | 210020 | 143293 |
| &nbsp;&nbsp;Total accrued expenses | $4302642 | $4301195 |

---

**NOTE 4. FAIR VALUE MEASUREMENTS**

Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows:

Level 1: Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2: Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

An asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company's financial instruments that are carried at fair value consist of Level 1 and Level 3 assets and liabilities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Level 1:**

oLevel 1 assets include highly liquid bank deposits and money market funds, which were not material in either period as of March 31, 2025 and December 31, 2024.

oLevel 1 liabilities include the Public Warrants, which are classified as Level 1 due to the use of an observable market quote in an active market, however, were determined to have no value as of March 31, 2025 and December 31, 2024 due to a notification from the New York Stock Exchange American ("NYSE American") in December 2023 that the NYSE American had determined to (a) commence proceedings to delist the Company's Public Warrants, each whole warrant exercisable to purchase one share of the Company's common stock, par value $0.0001 per share, at a price of $11.50 per share, and listed to trade on the NYSE American under the symbol "BURU.WS", and (b) immediately suspend trading in the Public Warrants due to "abnormally low" trading price levels.

------

[**<u>**Table of Contents**</u>**](#toc_page)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Level 3:**

oLevel 3 assets include the Convertible Loan Receivable (as defined and described in Note 5, *Convertible Loan Receivable*), which is classified as Level 3 due to the use of unobservable inputs in the valuation of the asset. There were no transfers between Level 1, Level 2, and Level 3 in any periods presented.

oLevel 3 liabilities include (i) the Junior Note Warrants (as defined and described in Note 8, *Notes and Convertible Notes Payable,* and Note 10, *Warrants*), (ii) the Indigo Capital Convertible Notes (as defined and described in Note 8, *Notes and Convertible Notes Payable*), and (iii) through early March 2025, the August 2024 Convertible Note Derivative Liability (as defined and described in Note 8, *Notes and Convertible Notes Payable*), each of which is classified as Level 3 due to the use of unobservable inputs in the valuation of the liability. Gains or losses from the remeasurement of (i) the Junior Note Warrants are recorded as part of change in fair value of warrant liabilities, (ii) the Indigo Capital Convertible Notes are recorded as part of change in fair value of debt and (iii) the August 2024 Convertible Note Derivative Liability are recorded as part of change in fair value of derivative liability in the condensed consolidated statements of operations. There were no transfers between Level 1, Level 2, and Level 3 in any periods presented.

The following tables set forth the fair value of the Company's financial assets and liabilities by level within the fair value hierarchy as of March 31, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **At March 31, 2025** | **At March 31, 2025** | **At March 31, 2025** | **At March 31, 2025** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Convertible Note Receivable | $— | $— | $260000 | $260000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $— | $— | $260000 | $260000 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Junior Note Warrants | $— | $— | $1315 | $1315 |
| &nbsp;&nbsp;Indigo Capital Convertible Notes |  |  | 4047000 | 4047000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $— | $— | $4048315 | $4048315 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Junior Note Warrants | $— | $— | $128615 | $128615 |
| Convertible note derivative liability <sup>(1)</sup> | $— | $— | $37900 | $37900 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the August 2024 Convertible Note Derivative Liability, as defined and described in Note 8, *Notes and Convertible Notes Payable*. In March 2025, the remaining August 2024 Convertible Notes were purchased by Indigo Capital and subsequently extinguished. For additional information, see Note 8.

**Level 3 Financial Assets**

***Convertible Loan Receivable***

The following table sets forth a summary of the changes in fair value of the Company's Convertible Loan Receivable:

---

| | |
|:---|:---|
|  | **Three Months Ended March 31,** |
|  | **2025** |
| Fair value, beginning balance | $— |
| Fair value at issuance | 260000 |
| Change in fair value |  |
| Fair value, ending balance | $260000 |

---

The aggregate fair value of the Convertible Loan Receivable was estimated using a Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the calculation of the fair value of the Convertible Loan Receivable were as follows:

---

| | |
|:---|:---|
|  | **Three Months Ended March 31,** |
|  | **2025** |
| **Convertible Note Receivable** |  |
| &nbsp;&nbsp;Stock price | £0.000035 |
| &nbsp;&nbsp;Expected term (in years) | 1.25 |
| &nbsp;&nbsp;Expected volatility | 157.7% |
| &nbsp;&nbsp;Risk-free interest rate | 4.2% |
| &nbsp;&nbsp;Expected dividend yield | 0.0% |

---

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Level 3 Financial Liabilities**

***Junior Note Warrants***

The following table sets forth a summary of the changes in fair value of the Company's Junior Note Warrants issued in November 2023:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Fair value, beginning balance | $128615 | $2238519 |
| Change in fair value | (127300) | (3311) |
| Fair value, ending balance | $1315 | $2235208 |

---

The aggregate fair value of the Junior Note Warrants was estimated using a Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the calculation of the fair value of the Junior Note Warrant liability were as follows:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| **Junior Note Warrants:** |  |  |
| &nbsp;&nbsp;Stock price | $0.19 | $0.14 |
| &nbsp;&nbsp;Expected term (in years) | 3.7 - 4.4 | 4.7 |
| &nbsp;&nbsp;Expected volatility | 62.4% - 65.2% | 69.8% |
| &nbsp;&nbsp;Risk-free interest rate | 3.9% | 4.2% |
| &nbsp;&nbsp;Expected dividend yield | 0.0% | 0.0% |

---

***Indigo Capital Convertible Notes***

The following table sets forth a summary of the changes in fair value of the Company's Indigo Capital Convertible Notes:

---

| | |
|:---|:---|
|  | **Three Months Ended March 31,** |
|  | **2025** |
|  | **(As Restated)** |
| Fair value, beginning balance | $— |
| Fair value at issuance | 5211100 |
| Fair value of debt converted | (907578) |
| Change in fair value | (256522) |
| Fair value, ending balance | $4047000 |

---

The aggregate fair value of the Indigo Capital Convertible Notes was estimated using a Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the calculation of the fair value of the Indigo Capital Convertible Notes during the three months ended March 31, 2025 were as follows:

---

| | |
|:---|:---|
|  | **Three Months Ended March 31,** |
|  | **2025** |
| **Indigo Capital Convertible Notes:** |  |
| &nbsp;&nbsp;Stock price | $0.19 - 0.26 |
| &nbsp;&nbsp;Expected term (in years) | 0.92 - 0.99 |

---

***August 2024 Convertible Note Derivative Liability***

In March 2025, the remaining August 2024 Convertible Notes were purchased by Indigo Capital and subsequently extinguished. For additional information, see Note 8.

The following table sets forth a summary of the changes in fair value of the Company's August 2024 Convertible Note Derivative Liability:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Fair value, beginning balance | $37900 | $— |
| Extinguishment of August 2024 Convertible Notes | (37900) |  |
| Fair value, ending balance | $— | $— |

---

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NOTE 5. CONVERTIBLE NOTE RECEIVABLE**

On March 14, 2025, the Company entered into a convertible facility with capacity of up to $5.15 million (the "Convertible Note Receivable") with Supply@ME Capital Plc ("SYME"), a fintech platform focused on Inventory Monetisation© solutions for manufacturing and trading companies. The Convertible Note Receivable bears interest at 14.33% annually based on the US Federal Funds Rate plus 10%. Upon conversion, the Company is expected to hold a controlling interest in SYME. Following approval by SYME stockholders, the Financial Conduct Authority, and The Panel on Takeovers and Mergers, the Company may convert amounts outstanding under the Convertible Note Receivable into ordinary shares of SYME at a fixed conversion ratio of £0.00003 per ordinary share, with conversion shares accompanied by a warrant to acquire one additional ordinary share of SYME for every two ordinary shares of SYME issued on any conversion, with an exercise price of £0.000039, as well as the ability to exercise on a cashless basis. If the Convertible Note Receivable is not converted into ordinary shares of SYME by June 30, 2026, the Company may demand repayment in full of the note in cash.

As of March 31, 2025, $150,000 has been funded under the Convertible Note Receivable, with full funding expected to occur by the end of the third quarter of 2025. Certain conversion features of the Convertible Note Receivable would typically be considered derivatives that would require bifurcation. In lieu of bifurcating various features in the agreement, we elected the fair value option for the Convertible Note Receivable. There were no changes in the fair value of the Convertible Note Receivable between the issuance and March 31, 2025. The excess of the initial fair value of $260,000 of the Convertible Note Receivable over the proceeds paid of $150,000 was recorded to additional paid-in capital during the three months ended March 31, 2025.

**NOTE 6. COMMITMENTS AND CONTINGENCIES**

**Operating Lease**

The Company leased approximately 27,900 square feet of office space in Centennial, Colorado under a noncancelable operating lease agreement. The original term of the lease was set to expire in December 2024, however, in November 2023, the Company elected to extend the lease through June 2025. In recognition of the ROU asset and the related lease liability as of March 31, 2025, any further options to extend the lease term have not been included as the Company was not reasonably certain to exercise any such option.

As further described in Note 1, the Company was in default under its lease, and the Landlord was in the process of pursuing available remedies in advance of the lease term that would otherwise expire in June 2025. In April 2025, the Landlord obtained a default judgment against the Company in the amount of $409,278. The Landlord may exercise rights under the lease agreement and applicable law with respect to a lessee in default and such lessee's assets located on the premises, including the removal and disposal of inventories and property and equipment remaining on the property. As such, as of March 31, 2025, the Company determined that, based on the assumption that the Landlord would fully exercise its rights with respect to all assets remaining on the premises, (i) it no longer had control over the inventory and that recovery was not probable, therefore, inventory was written down to a net realizable value of zero, (ii) the carrying value of its property and equipment, all of which was at the leased location, was no longer recoverable, and the assets were written down to a net book value of zero, and (iii) the right-of-use asset associated with this lease was fully impaired, as the Company could no longer use the leased premises, each of which is recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

As of March 31, 2025, the Company's ROU lease liability was $119,720. As such, the Company accrued an additional $289,558 related primarily to unpaid future rent payments, interest and attorney's fees within accrued expenses on the condensed consolidated balance sheet as of March 31, 2025.

In connection with the default under the lease described above, the Company recorded an impairment to reduce the right-of-use asset to zero of $150,077, which is recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

Operating lease cost was $102,938 for each of the three months ended March 31, 2025 and 2024.

**Liqueous Settlement Agreement**

In January 2025 and April 2025, in connection with a settlement and mutual release agreement entered into between the Company and Liqueous LP ("Liqueous") (the "Liqueous Settlement Agreement"), as amended, the parties provided an immediate mutual release of claims and obligations through payments from Liqueous to the Company in an aggregate $1,450,000, of which $1,000,000 was paid during the first quarter of 2025. Such payment was made in connection with the issuance of the remaining 9,186,581 shares issued to extinguish an aggregate $411,865 of principal and accrued interest under the Junior Notes and, accordingly, reduced the loss on extinguishment of debt recorded.

**Legal Proceedings**

In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for legal proceedings when it is probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued.

During the first quarter, the Company was subject to three separate actions seeking default judgments for the alleged failure to pay amounts when due. CFGI, LLC is seeking a total judgment in the amount of $86,826 through the Superior Court of the Commonwealth of Massachusetts, FICTIV, Inc. obtained a default judgment through the Superior Court of California on January 30, 2025 in the amount $197,899, which was subsequently settled by the Company, and the Landlord sought a total judgment in the amount of $409,278 through the Arapahoe County Colorado District Court, which it obtained in April 2025. See additional detail regarding the Landlord default judgment in Inventory, Property and Equipment and Right-of-Use Asset Impairment in Note 1.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Purchase Commitments**

As of March 31, 2025, the Company had $455,048 in outstanding firm purchase commitments to acquire inventory and research and development parts from suppliers for the Company's ongoing operations. The Company's purchase commitments do not reflect any liabilities that are included on our March 31, 2025 condensed consolidated balance sheet.

**Related Party Transactions**

Ron Nicol, who was the Executive Chairman of the Company's board of directors through January 2025, paid director and officer insurance premiums of approximately $1.5 million on behalf of the Company because the Company did not have available cash to pay such amounts when due. The Company is obligated to repay such amount to Mr. Nicol, without interest or other charges. As of March 31, 2025 and December 31, 2024, such amount is included in accrued expenses on our condensed consolidated balance sheet.

In January 2025, the Company issued the TAG Promissory Note to The AvantGarde Group ("TAG"), which is founded and owned by the Company's Executive Chairman, as a replacement of a previously recorded shareholder advance. For additional information, see Note 8, *Notes and Convertible Notes Payable.*

**Trumar Capital LLC Acquisition Agreement**

On February 19, 2025, the Company entered into a commitment letter with Trumar Capital LLC ("TCEI") to acquire: (i) a license of certain technology that would allow the Company to expand its existing business within the defense sector; (ii) a controlling interest in a defense-tech company that specializes in the design, production, and outfitting of a diverse range of vehicles, including industrial and military applications, as well as electronic devices for defense and security, advanced telecommunications, and tracking systems; and (iii) a controlling interest in a Software as a Service (SaaS) startup focused on operational resilience. The Company's Executive Chairperson owns a controlling interest in the SaaS target entity, and as a result, the proposed investment will be negotiated by, and authorized only with approval from, the independent board members, and will be subject to stockholder approval.

The anticipated investments will occur in stages. The first stage, which has been completed, involved the purchase of a 20% ownership interest in TCEI for an aggregate price of $1.5 million in cash plus $23.5 million in a note payable. The note payable, which is cancellable if the second stage of the transaction discussed below is not completed, matures in five-years, bears a 10% annual interest rate, and includes monthly payments beginning after the second stage is completed. As the note is cancellable if the second stage is not completed, it has not been recorded in the condensed consolidated financial statements. Of the $1.5 million cash portion of the purchase price, $600,000 was paid and reflected as a deposit on acquisition on the condensed consolidated balance sheet, while $900,000 was retained by the Company. The $900,000 retained is payable to the Company's Executive Chairman as the controlling shareholder of the SaaS target entity, which has not been recorded in the condensed consolidated financial statements due to the related party nature of both the deposit and such related party payable.

The second stage, which will require both stockholder and regulatory approval, will involve the investment in additional ownership interests, resulting in Nuburu (i) having a controlling interest in the target entities and (ii) issuing Common Stock in excess of 19.9% of its outstanding Common Stock as part of the purchase price. Nuburu would also receive rights to appoint directors for each target entity, consistent with its percentage of ownership in each entity.

We also agreed to issue 6,086,957 shares of common stock to S.F.E. Equity Investments SARL ("SFE EI") as consideration for SFE EI escrowing approximately $4.2 million in assets for purposes of guaranteeing our performance obligations in connection with the TCEI acquisition. Issuances to SFE EI may not exceed 19.9% of the outstanding Common Stock until approved by stockholders.

Consummation of the full TCEI acquisition is subject to continued due diligence, receipt of an acceptable valuation from a third-party valuation firm, regulatory approvals, and stockholder consent. The Company concluded that because of these contingencies, it has not assumed the risks and rewards consistent with equity ownership at the time of the initial investment. Consequently, the Company recorded the initial payment as a deposit on the anticipated acquisition of TCEI. Similarly, the Company will not record the contingent liability for the commitment, including the notes, until it is both probable and estimable that the liability has been incurred.

On March 31, 2025, the Company also entered into a Joint Pursuit Agreement with the defense-tech company to allow both parties to jointly develop and market certain defense-related vehicles and services in advance of closing the full TCEI acquisition.

**NOTE 7. REVENUE**

The Company's primary revenue-generating activity involves sales of high-powered lasers and related installation services. The Company has sales to customers throughout the U.S., Europe, and Asia. All sales are settled in U.S. dollars.

The following table presents revenue from contracts with customers disaggregated by geography:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| United States | $— | $15000 |
| Asia |  | 1546 |
| Europe |  | 77003 |
| &nbsp;&nbsp;Total | $— | $93549 |

---

The following table presents revenue from contracts with customers disaggregated by the timing of revenue recognition:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Revenue recognized at a point in time | $— | $78549 |
| Revenue recognized over time |  | 15000 |
| &nbsp;&nbsp;Total | $— | $93549 |

---

------

[**<u>**Table of Contents**</u>**](#toc_page)

Contract liabilities consist of customer deposits that are applied to invoices as the performance obligation is performed. Accounts receivable and contract liabilities were as follows on the dates presented:

---

| | | |
|:---|:---|:---|
|  | **Accounts Receivable** | **Contract Liabilities** |
| January 1, 2024 | $482279 | $30400 |
| December 31, 2024 |  | 24000 |
| March 31, 2025 |  | 24000 |

---

During the three months ended March 31, 2025 and 2024, the Company recognized nil and $23,400 of revenue that was included in the contract liabilities balance at the beginning of the reporting period, respectively.

**NOTE 8. NOTES AND CONVERTIBLE NOTES PAYABLE**

As of March 31, 2025 and December 31, 2024, the Company's outstanding debt consisted of the following. Please refer to the remainder of this footnote for more information on the debt issued during the periods presented.

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
| Current portion of notes payable: |  |  |
| &nbsp;&nbsp;Indigo Capital Convertible Notes | $4047000 | $— |
| &nbsp;&nbsp;Liqueous Promissory Note | 1053824 | 1053824 |
| &nbsp;&nbsp;TAG Promissory Note | 545000 |  |
| &nbsp;&nbsp;Junior Notes Issued November 2023 |  | 2369122 |
| &nbsp;&nbsp;August 2024 Convertible Notes |  | 537375 |
| &nbsp;&nbsp;Additional August 2024 Convertible Notes |  | 687315 |
| &nbsp;&nbsp;Senior Convertible Notes Issued June 2023 |  | 4683069 |
| &nbsp;&nbsp;Unamortized debt discount and deferred financing costs |  | (88522) |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of notes payable | $5645824 | $9242183 |

---

**Junior Notes Issued November 2023**

On November 13, 2023, the Company entered into Note and Warrant Purchase Agreements (the "Junior Note Purchase Agreements") with the lenders identified therein (the "Lenders") providing for (i) zero-interest promissory notes, issued with a 10% original issue discount, in the aggregate principal amount of $5,500,000 (the "Junior Notes"), and (ii) warrants ("Junior Note Warrants," refer to Note 10,Warrants), exercisable for an amount of the Company's common stock equal to 100% of the principal amount of the Junior Notes (limited to an aggregate of 19.9% of the Company's outstanding common stock until such time as the transaction is approved by the Company's stockholders), which are exercisable for $5.00 per share of the Company's common stock (subject to adjustments noted in the Junior Note Purchase Agreements).

The Junior Notes were junior and secured by the Company's patent portfolio pursuant to a security agreement among the parties (the "Security Agreement"). The terms of the Junior Notes provided that they would mature on the earlier of: (i) the Company closing a credit facility in principal amount of at least $20 million, (ii) a Sale Event (as defined in the Junior Note Purchase Agreements), or (iii) twelve months after issuance. The Junior Notes contained customary events of default. Because the Junior Notes had not been repaid within six or nine months after issuance, the Junior Notes began to bear interest at the SOFR rate plus 9% and at the SOFR rate plus 12%, respectively, and additional 25% warrant coverage was required at each such date, with a per share exercise price equal to 120% of the trading price of the Company's common stock at the time of issuance and a redemption right in favor of the Company when the trading price of the common stock is greater than 200% of the applicable exercise price for 20 out of any 30 consecutive trading days. Shares of common stock issuable upon exercise of the Junior Note Warrants are limited to an aggregate of 19.9% of the Company's outstanding common stock until such time as the transaction is approved by the Company's stockholders. The obligations under the Junior Notes were extinguished in connection with the Foreclosure (defined below).

Refer to Note 10 for the Company's accounting for the Junior Note Warrants. As a result of that accounting, the Notes contain the original issue discount of $500,000 as well as the discount associated with the Junior Note Warrant liability of $2,668,169. The discount will be amortized over the term of the Junior Notes in accordance with FASB ASC 835 - *Interest.* 

***Extinguishment****s*

During the three months ended March 31, 2025, the Company issued 9,186,581 shares to noteholders to extinguish an aggregate $411,865 of principal and accrued interest under the Junior Notes. The reacquisition value of the debt was higher than the related carrying value, and thus resulted in an aggregate net loss on extinguishment of debt of $1,174,519 recorded in the condensed consolidated statement of operations.

See Foreclosure collateral sale further below in this Note 8 for discussion of the extinguishment of the remaining Junior Notes on March 5, 2025.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***Related Parties***

The table below summarizes the outstanding principal amount of the Junior Notes to related parties:

---

| | | |
|:---|:---|:---|
| **Noteholder** | **March 31,<br>2025** | **December 31,<br>2024** |
| David Seldin<sup>(1)</sup> | $— | $762211 |
| Eunomia, LP<sup>(2)</sup> |  | 1100000 |
| Total Junior Notes - related parties | $— | $1862211 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)David Seldin was a member of the Legacy Nuburu board of directors and at the time of the issuance was the sole manager of Anzu Nuburu LLC, Anzu Nuburu II LLC, Anzu Nuburu III LLC and Anzu Nuburu V LLC (the "Anzu SPVs"), which at that time owned more than 5% of Legacy Nuburu's capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Ron Nicol, manager of Eunomia, LP, was the Executive Chairman of the Company's board of directors through January 2025.

**Junior Notes Issued August 2024 (the "August 2024 Convertible Notes")**

On August 6, 2024 and August 19, 2024, the Company entered into a subordinated convertible note agreement (the "August 2024 Convertible Note Agreement") with Esousa Group Holdings LLC ("Esousa") for the sale of convertible notes (the "August 2024 Convertible Notes") in the aggregate principal amount of $673,000, issued at a discount of $25,000. The August 2024 Convertible Notes bore interest at 15% per annum, with principal and accrued interest due at maturity on February 6, 2025, unless earlier paid or converted into common stock. The notes were prepayable at any time prior to the maturity date without penalty. Upon the occurrence and continuance of an event of default or spin-off of a subsidiary, a default interest rate of an additional 5% per annum could be applied to any outstanding borrowings (in the case of an event of default only) and the investor could declare all outstanding principal plus accrued interest immediately due. Additionally, at any point after issuance, the investor had the option to convert the August 2024 Convertible Notes into common stock at the lower of (i) a fixed price of $2.03 or (ii) 80% of the lowest daily volume weighted-average price in the 10 trading days prior to such conversion date, subject to certain adjustments. Issuances of common stock on conversion were (i) subject to approval by NYSE American of a supplemental listing application, (ii) limited to an amount equal to 19.9% of the outstanding common stock as of the date of execution, until such time as the transaction was approved by stockholders and (iii) required to be registered with the SEC for resale.

The Company determined that the conversion and share-settled redemption features, as well as the automatic increase in interest rate upon an event of default feature, of the August 2024 Convertible Notes were embedded derivatives that were required to be bifurcated from the host instrument and accounted for as embedded derivative instruments, which the Company compounded (the "August 2024 Convertible Note Derivative Liability"). As the Company did not elect the fair value option for the August 2024 Convertible Notes, the proceeds from the August 2024 Convertible Notes were allocated to the initial fair value of the August 2024 Convertible Note Derivative Liability, which was determined to be $179,000, with the residual balance allocated to the initial carrying value of the August 2024 Convertible Notes host instrument. For additional information related to the fair value of the August 2024 Convertible Note Derivative Liability, see Note 4.

The Company incurred $114,800 in deferred financing costs for legal fees related to the issuance of the August 2024 Convertible Notes. Additionally, in connection with the issuance of the August 2024 Convertible Notes, the Company issued warrants to a financial services firm as compensation for their services performed, the fair value of which was determined to be $40,657 and was recorded as a deferred financing cost. For additional information regarding these warrants, see Note 10.

Concurrent with the above, Esousa also purchased $687,315 of outstanding principal and accrued interest under the Senior Convertible Notes from an existing investor and subsequently exchanged such notes for subordinated convertible notes (the "Additional August 2024 Convertible Notes"). The Additional August 2024 Convertible Notes could be prepaid at any time without penalty, did not accrue interest, matured on February 6, 2025 and could be converted at any time on or after the issuance date into common stock at a conversion price of 25% of the closing price of the common stock on the trading day prior to such conversion date, subject to certain adjustments.

The August 2024 Convertible Notes and Additional August 2024 Convertible Notes were unsecured and subordinated to the Company's outstanding Senior Convertible Notes and Junior Notes in right of payment, whether in respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.

***Extinguishment****s*

During the three months ended March 31, 2025, the Company issued 1,878,620 shares to Esousa to extinguish an aggregate $389,375 of principal and accrued interest under the August 2024 Convertible Notes. The reacquisition value of the debt was higher than the related carrying value, and thus resulted in an aggregate net loss on extinguishment of debt of $480,399 recorded in the condensed consolidated statement of operations.

In March 2025, the remaining August 2024 Convertible Notes were purchased by Indigo Capital and subsequently extinguished, as further described below. The transaction resulted in a loss on extinguishment of debt of $2,123,403 associated with the extinguishment of these notes.

**Senior Convertible Notes Issued June 2023**

On June 12, 2023 and June 16, 2023, the Company entered into Note and Warrant Purchase Agreements (the "Senior Convertible Note Purchase Agreements") with certain investors (each, an "Investor") for the sale of (i) convertible promissory notes ("Senior Convertible Notes") in the aggregate principal amount of $9,225,000, and (ii) warrants ("Senior Note Warrants," refer to Note 10, *Warrants*) to purchase up to 287,972 shares of the Company's common stock from the June 12, 2023 Purchase Agreement and up to 47,238 shares of Common Stock from the June 16, 2023 Purchase Agreement.

------

[**<u>**Table of Contents**</u>**](#toc_page)

The Senior Convertible Notes were senior, secured obligations of the Company, which became secured by the Company's patent portfolio per the Security Agreement as of November 2023, bore interest at the rate of 7.0% per annum, and were payable on the earlier of June 23, 2026 or the occurrence of an Event of Default, as defined in the Senior Convertible Notes. The Senior Convertible Notes were senior to the Junior Notes pursuant to an intercreditor agreement between the parties. The Senior Convertible Notes could be converted at any time following June 23, 2023 and prior to the payment in full of the principal amount of the Senior Convertible Notes at the Investor's option.

As further described above, during August 2024, $687,315 of outstanding principal and accrued interest under the Senior Convertible Notes was purchased by another investor and subsequently exchanged for the issuance of a subordinated convertible note.

On December 16, 2024, the Lead Investor (as defined in the agreement governing the Senior Convertible Notes) issued a notice of default and acceleration, as well as a demand for payment, to the Company as a result of the failure of the Company to make certain required repayments under existing debt obligations, which constituted an event of default under the terms of the Senior Convertible Notes. The obligations under the Senior Convertible Notes were extinguished in connection with the Foreclosure (defined below).

***Extinguishment****s*

See Foreclosure collateral sale further below in this Note 8 for discussion of the extinguishment of the remaining Senior Convertible Notes on March 5, 2025.

***Related Parties***

The table below summarizes the outstanding principal amount of the Senior Convertible Notes to related parties:

---

| | | |
|:---|:---|:---|
| **Investor** | **March 31,<br>2025** | **December 31,<br>2024** |
| Wilson-Garling 2023 Family Trust<sup>(1)</sup> | $— | $5138055 |
| Eunomia, LP<sup>(2)</sup> |  | 1027611 |
| Curtis N Maas Revocable Trust<sup>(3)</sup> |  | 102761 |
| Total Senior Convertible Notes - related parties | $— | $6268427 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Thomas J. Wilson, an affiliate of Wilson-Garling 2023 Family Trust, was a member of the Legacy Nuburu board of directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Ron Nicol, manager of Eunomia, LP, is the Chairman of the Company's board of directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Curtis Maas, an affiliate of the Curtis N Maas Revocable Trust, was a member of the Legacy Nuburu board of directors.

**Foreclosure Collateral Sale**

On March 5, 2025, as part of the foreclosure process initiated by the Lead Investor (the "Foreclosure"), the lenders holding the outstanding Senior Convertible Notes held an auction for the sale of collateral securing the Company's repayment obligations, which resulted in such lenders taking possession of such collateral in exchange for a full discharge and extinguishment of the Company's $8,961,872 of indebtedness with respect to the Junior Notes and Senior Convertible Notes, as well as a loss on extinguishment of the Senior Convertible Notes of $1,682,641, of which $27,139 of this loss relates to related parties. The extinguishment of the Junior Notes did not result in a gain or loss on extinguishment as the proceeds deemed to be received by the holders of the Junior Notes in connection with the Foreclosure approximated the carrying value of the Junior Notes and all issuance costs were fully amortized. The loss on extinguishment of the Senior Convertible Notes is included within loss on extinguishment of debt within the condensed consolidated statement of operations for the three months ended March 31, 2025.

**Liqueous Promissory Note**

In October 2024, the Company entered into an unsecured promissory note (the "Liqueous Promissory Note") with Liqueous for a principal amount of $1,053,824. The Liqueous Promissory Note was subordinated to the Company's other outstanding debt instruments, accrued interest at 8% per annum and matured in October 2025. The note was prepayable at any time prior to the maturity date without penalty. Upon an event of default, the investor could require all outstanding and accrued interest immediately due and payable.

In February 2025, in connection with the Liqueous Settlement Agreement, as amended, the Company agreed to issue 6,406,225 pre-funded warrants exercisable into common stock, which included a nominal exercise price, to extinguish the Liqueous Promissory Note. As the pre-funded warrants were not yet issued as of March 31, 2025, the Company continued to remain legally obligated under the terms of the Liqueous Promissory Note. In April 2025, through an additional amendment to the Liqueous Settlement Agreement, the Company agreed to settle the Liqueous Promissory Note through the issuance of 9,090,959 shares of common stock.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**TAG Promissory Note (Related-Party)**

In January 2025, the Company issued a promissory note in a principal amount of $545,000 to The AvantGarde Group ("TAG"), which is founded and owned by the Company's Executive Chairman, as a replacement of a previously recorded shareholder advance (the "TAG Promissory Note"). The TAG Promissory Note is subordinated to the Company's other outstanding debt instruments at the time of issuance, accrues interest beginning October 28, 2025 at the Secured Overnight Financing Rate ("SOFR") plus a margin of 10% per annum and matures in January 2026. The note is prepayable at any time prior to the maturity date without penalty. Upon an event of default, all outstanding and accrued interest is immediately due and payable.

**Indigo Capital Convertible Notes**

On March 3, 2025, the Company entered into the following transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in exchange for a capital infusion of $1,500,000, the Company issued to Indigo Capital LP ("Indigo Capital") a $1,578,495 face amount unsecured, convertible note (the "Indigo Capital Convertible Note"). The Indigo Capital Convertible Note bears no interest for so long as it is not in default and has a March 1, 2026 maturity date and a conversion price equal to a 20% discount to the lowest VWAP during the 5 days prior to the conversion date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in exchange for the extinguishment of the remaining August 2024 Convertible Notes held by Indigo Capital, which it purchased from Esousa on March 3, 2025, the Company issued to Indigo Capital a $894,708 face amount unsecured, convertible note (the "Indigo Capital Exchange Convertible Note"), collectively with the Indigo Capital Convertible Note, the "Indigo Capital Convertible Notes". The Indigo Capital Exchange Convertible Note bears no interest for so long as it is not in default, and has March 1, 2026 maturity date and a conversion price equal to 33.33% of the lowest VWAP during the 5 days prior to the conversion date.

Issuances of common stock on conversion of the Indigo Capital Convertible Notes are limited to an amount equal to 19.9% of the outstanding common stock as of the date of execution, until such time as the transaction is approved by stockholders.

The transaction documents contain customary representations, warranties, and covenants, and the notes include customary events of default including, but not limited to, failure to pay amounts due when required, default in covenants, bankruptcy events, and suspension or delisting from trading of the common stock on an eligible exchange. The Company is also obligated to register for resale the shares issuable upon conversion of the notes.

Certain conversion features of the Indigo Capital Convertible Notes would typically be considered derivatives that would require bifurcation. The Indigo Capital Convertible Notes are recorded at fair value, and the changes in the fair value are recorded within the condensed consolidated statement of operations. The excess of the initial fair value of $2,207,800 of the Indigo Capital Convertible Note over the proceeds received was recorded as a loss on issuance of debt on the condensed consolidated statement of operations of $707,800 during the three months ended March 31, 2025. The excess of the initial fair value of $3,003,300 of the Indigo Capital Exchange Convertible Note over the carrying amount of the August 2024 Convertible Notes was recorded as a loss on debt extinguishment on the condensed consolidated statement of operations of $2,123,403 during the three months ended March 31, 2025. Transaction costs of $20,000 were expensed as incurred and included in the consolidated statements of operations as a component of general and administrative expenses.

In March 2025, Indigo Capital converted $307,320 of contractual principal under the Indigo Capital Exchange Convertible Notes, resulting in the issuance of 4,313,272 shares of Common Stock to Indigo Capital at a fair value of $907,578, which resulted in a gain of $124,014 recorded within change in fair value of debt in the condensed consolidated statements of operations for the three months ended March 31, 2025.

**NOTE 9. CONVERTIBLE PREFERRED STOCK**

***Series A Preferred Stock***

The Company is authorized to issue 50,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company's board of directors. As of both March 31, 2025 and December 31, 2024, there were 2,388,905 shares of preferred stock issued and outstanding.

*Ranking*

The Company's Preferred Stock ranks senior to the Company's Common Stock with respect to rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

*Dividends*

Holders of the Company's Preferred Stock participate, on an as-converted basis (without regard to any conversion limitations) in all dividends paid to the holders of the Company's Common Stock.

*Conversion Rights*

Prior to January 31, 2025, as further described under *Redemption* below, the Preferred Stock was convertible at any time into Common Stock at a conversion price equal to $10.00 (subject to equitable adjustment in the event of a stock split, stock consolidation, subdivision or certain other events of a similar nature that increase or decrease the number of shares of Preferred Stock outstanding (the "Original Issuance Price")) divided by the lesser of (i) $11.50 and (ii) the greater of (x) 115% of the lowest volume-weighted average price per share of the Company's Common Stock as displayed under the heading Bloomberg VWAP (the "VWAP") for any consecutive ninety-trading day period prior to the calculation of such VWAP and (y) $5.00, in each case subject to adjustment as set forth in the Certificate of Designations (the "Conversion Price").

*Mandatory Conversion*

------

[**<u>**Table of Contents**</u>**](#toc_page)

If the VWAP is greater than 200% of the Conversion Price for any 20 trading days in a 30-day trading day period, the Company may elect to convert all, but not less than all, of the Preferred Stock then outstanding into the Company's Common Stock at a conversion rate with respect to each share of Preferred Stock equal to the Original Issuance Price as of the date of such conversion divided by the then applicable Conversion Price.

*Voting Rights*

The holders of Preferred Stock are not entitled to vote at or receive notice of any meeting of stockholders, except the holders of Preferred Stock are entitled to certain consent rights on matters related to (i) the creation or authorization of the creation of any equity or debt securities of the Company that rank senior or equal to certain rights of the Preferred Stock and (ii) the authorization of any adverse change to the powers, preferences, or special rights of the Preferred Stock set forth in the Company's Certificate of Incorporation or Bylaws, and shall have voting rights as required by law.

*Redemption*

On the second anniversary of the Closing Date, or January 31, 2025 (the "Test Date"), the Company is obligated to redeem the maximum portion of the Preferred Stock permitted by law in cash at an amount equal to the Original Issuance Price as of such date if the Conversion Price exceeds the VWAP. If, on the Test Date, the Conversion Price is equal to or less than the VWAP, the Company must convert all shares of Preferred Stock then outstanding into shares of the Company's Common Stock at the then applicable Conversion Price. Notwithstanding the foregoing, the Company shall not be required to redeem any shares of Preferred Stock to the extent the Company does not have legally available funds to effect such redemption. The mandatory redemption and conversion provisions described herein are further subject to certain limitations detailed in the Certificate of Designations. As a result of such redemption feature, the Company recorded the Preferred Stock at its redemption value and classified the Preferred Stock as mezzanine equity on the consolidated balance sheet through January 31, 2025. As the Conversion Price of the Preferred Stock exceeded the VWAP on the Test Date, the Company was obligated to redeem the Preferred Stock beginning at that time and, as such, reclassified such Preferred Stock from mezzanine equity to a short-term liability on January 31, 2025. The preferred stock short-term liability was initially recorded at its fair value on January 31, 2025 of $13,491,000 and subsequently remeasured to its redemption amount of $10.00 per share, or $23,889,050, as the Preferred Stock is currently mandatorily redeemable at such amount, with the difference between the initial fair value and carrying value of $10,398,050 recorded as an adjustment to net loss available to common shareholders. The remeasurement of the liability subsequent to issuance and through March 31, 2025 of $10,398,050 is recorded within interest expense recognized on remeasurement of preferred stock liability.

**NOTE 10. WARRANTS**

The following table provides a summary of the number of the Company's outstanding warrants:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br>2025** | **December 31,<br>2024** |
| **Liability classified warrants:** |  |  |
| &nbsp;&nbsp;Junior Note Warrants | 859315 | 859315 |
| &nbsp;&nbsp;Public Warrants | 417770 | 417770 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liability-classified warrants outstanding | 1277085 | 1277085 |
| **Equity classified warrants:** |  |  |
| &nbsp;&nbsp;June 2023 Senior Note Warrants | 335210 | 335210 |
| &nbsp;&nbsp;Pre-Funded Warrants |  | 837116 |
| &nbsp;&nbsp;August 2024 Warrants Issued with Junior Notes | 19892 | 19892 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total equity-classified warrants outstanding | 355102 | 1192218 |

---

**Liability Classified Warrants**

***November 2023 Junior Note Warrants***

In connection with the Junior Notes discussed in Note 8 - *Notes and Convertible Notes Payable,* the Company issued the Junior Note Warrants to purchase up to 550,000 shares of the Company's common stock. The Junior Note Warrants currently outstanding have an exercise price equal to $5.00 per share (subject to adjustment per the Junior Note Purchase Agreements) and expire on December 6, 2028. The Junior Note Purchase Agreements also provide for additional warrants to be issued if the Junior Notes remain outstanding for certain periods of time: (i) if the Junior Notes have not been repaid six months after issuance, additional warrants will be issued to each Lender in an amount equal to the principal amount of the Note multiplied by 25%, and such quotient divided by a per share cash exercise price equal to 120% of the Volume Weighted Average Price ("VWAP") of the Company's Common Stock during the ten trading days immediately prior to issuance and (ii) if the Junior Notes have not been repaid nine months after issuance, additional warrants will be issued to each Lender in an amount equal to the principal amount of the Note multiplied by 25%, and such quotient divided by a per share cash exercise price equal to 120% of the VWAP of the Company's Common Stock during the ten trading days immediately prior to issuance. As a portion of the Junior Notes were outstanding at each of May 13, 2024 and August 13, 2024, the Company was required to issue 309,315 additional warrants pursuant to the Junior Note Purchase Agreements during the year ended December 31, 2024.

Based on the terms of the Junior Note Purchase Agreements, the Junior Note Warrants were evaluated under FASB ASC 815-40 *- Derivatives and Hedging-Contracts in Entity's Own Equity* ("ASC 815-40") and the Company concluded they did not initially meet the criteria to be classified in stockholders' equity (deficit). Specifically, there were contingent exercise provisions and settlement provisions that existed, as described above, where the number of shares available under the Junior Note Warrants may be adjusted. Because the number of outstanding common shares was not a fair value input to a fixed-for-fixed model, the Junior Note Warrants are treated as liabilities and are remeasured at each reporting date. The proceeds of $5,500,000 were allocated first to the Junior Note Warrant liability at fair value and then to the Junior Notes. The Company further determined that the Junior Warrant liability meets the criteria to be accounted for as a bifurcated derivative due to the significant discount it creates on the Junior Notes.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***Public Warrants***

In connection with the closing of the Business Combination, Nuburu assumed the 16,710,785 Public Warrants outstanding on the date of Closing. As of March 31, 2025, all 16,710,785 Public Warrants remain outstanding. However, on December 12, 2023, the NYSE notified the Company and publicly announced that the NYSE had determined to (a) commence proceedings to delist the Company's Public Warrants, each whole Public Warrant exercisable to purchase one share of the Company's common stock at a price of $460.00 per share, and listed to trade on the NYSE under the symbol "BURU WS", and (b) immediately suspend trading in the Public Warrants due to "abnormally low" trading price levels. As such, the Public Warrants were determined to have no value in the financial statements as of March 31, 2025.

Each whole Public Warrant entitles the registered holder to purchase one share of Common Stock at a price of $460.00 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of the Business Combination. Pursuant to the Warrant Agreement, a Public Warrant holder may exercise its warrants only for a whole number of shares of Common Stock. The Public Warrant will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

*Redemptions of Public Warrants when the price of Common Stock equals or exceeds $720.00* — Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in whole and not in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at a price of $0.40 per warrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•upon not less than 30 days' prior written notice of redemption to each warrant holder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•if, and only if, the closing price of the Common Stock equals or exceeds $720.00 per share for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

If and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

*Redemption of Public Warrants when the price per share of Common Stock equals or exceeds $400.00* — Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in whole and not in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at $16.00 per warrant upon a minimum of 30 days' prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•if, and only if, the last reported sale price of the Common Stock equals or exceeds $400.00 per share (as adjusted per stock splits, stock dividends, reorganizations, reclassifications, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•if the closing price of the Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $720.00 per share, the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

**Equity Classified Common Stock Warrants**

***June 2023 Senior Note Warrants***

In connection with the issuance of Senior Convertible Notes discussed in Note 8 - *Notes and Convertible Notes Payable*, the Company issued the Senior Note Warrants to purchase up to 287,972 shares of the Company's common stock pursuant to the June 12, 2023 Purchase Agreement and 47,238 shares of Common Stock pursuant to the June 16, 2023 Purchase Agreement. The Senior Note Warrants have an exercise price equal to $41.20 per share and expire on June 23, 2028.

As the Senior Note Warrants were part of a bundled transaction, the gross proceeds from the issuance of $9,225,000 were allocated to the Senior Convertible Notes and the Senior Note Warrants based on their respective relative fair value upon issuance. The aggregate fair value of the Senior Note Warrants of $3,401,366 was estimated using the Black-Scholes option-pricing model with the following assumptions:

---

| | |
|:---|:---|
|  | **Upon Issuance** |
| **Common Stock Warrants:** |  |
| &nbsp;&nbsp;Expected term (in years) | 5.0 |
| &nbsp;&nbsp;Expected volatility | 47.9% |
| &nbsp;&nbsp;Risk-free interest rate | 4.0% |
| &nbsp;&nbsp;Expected dividend yield | 0.0% |

---

The allocated proceeds from the Senior Note Warrants of $2,511,759 were recorded in additional paid-in capital in the condensed consolidated balance sheets upon issuance of the Senior Note Warrants.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***Pre-Funded Warrants***

On May 1, 2024, the Company entered into a Pre-Funded Warrant Purchase Program (the "Program") with strategic investors, pursuant to which from time-to-time the Company could sell and the investors could acquire pre-funded warrants, up to a total purchase price to the Company equal to $15 million. The exercise price for pre-funded warrants is substantially paid by the purchaser at closing and, as a result, such warrants may be exercised in the future with a nominal exercise price payment. Investors also received a warrant to acquire the same number of shares covered by the pre-funded warrant for a purchase price equal to 150% of the relevant pre-funded warrant purchase price exercisable for a period of 5 years. Each specific transaction was entered into on terms agreed by the parties; provided however, that in no case would the purchase price per share be less than 110% of the closing price per share of the Company's common stock on the trading day immediately preceding the date of purchase. Contemporaneously with the acquisition of pre-funded warrants, the investors could also voluntarily convert outstanding notes previously issued by the Company; provided that such transactions, as a whole, could not result in an effective direct or indirect discount to market price to the investors of greater than 30%. During 2024, the Company issued 837,116 pre-funded warrants for total cash proceeds of $2,139,866 in pre-funded warrants pursuant to the Program.

Pre-Funded Warrants Modification— In February 2025, in connection with the Liqueous Settlement Agreement, as amended, the Company agreed to (i) modify 665,410 outstanding equity-classified Pre-Funded Warrants issued in connection with the Program during 2024, resulting in the issuance of 3,647,416 equity-classified pre-funded warrants outstanding immediately after the modification exercisable into common stock and (ii) modify the remaining 171,706 outstanding equity-classified Pre-Funded Warrants issued in connection with the Program during 2024, resulting in 9,360,888 pre-funded warrants outstanding immediately after the modification that were concurrently exercised into 9,360,888 common shares of the Company for no additional cash consideration, as the modified pre-funded warrants had a nominal exercise price (the "Pre-Funded Warrants Modification"). As a result of the Liqueous Settlement Agreement, there will not be further issuances under the Program.

The Company accounted for the Pre-Funded Warrants Modification in accordance with ASC 815, Derivatives and Hedging, where the effect of a modification shall be measured as the difference between the fair value of the modified warrant over and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. As a result of the Pre-Funded Warrants Modification, which was not contemplated as a result of an equity or debt financing, but rather, as a settlement of any claims between the parties related to non-performance of obligations under certain previous agreements executed between the Company and Liqueous, the Company recorded (i) an increase to additional paid-in capital of $3,075,444 related to the incremental fair value of the modified Pre-Funded Warrants over the fair value of the original Pre-Funded Warrants, each measured on the modification date and (ii) a loss on settlement of an aggregate $2,026,380, which represents the incremental fair value of the modified Pre-Funded Warrants over the fair value of the original Pre-Funded Warrants, each measured on the modification date, less cash received or receivable related to the Liqueous Settlement Agreement of $1,050,000. The loss on settlement is recorded in loss on settlement of the condensed consolidated statement of operations during the three months ended March 31, 2025.

In March 2025, the 3,647,416 outstanding warrants were exercised into 3,647,416 shares of common stock for no additional cash consideration, as the pre-funded warrants had a nominal exercise price.

***August 2024 Warrants Issued with Junior Notes*** 

As discussed in Note 8, in connection with the issuance of the August 2024 Convertible Notes, the Company issued an aggregate 19,892 warrants to a financial services firm as compensation for their services performed, the fair value of which was determined to be $40,657 and was recorded as a deferred financing cost and associated additional paid-in capital in the consolidated balance sheet, as the warrants were determined to be equity classified. The warrants are exercisable through payment of an exercise price ranging from $2.18 to $3.18, subject to certain customary antidilution adjustments, at any time after issuance through the expiration date in August 2029.

**NOTE 11. STOCK-BASED COMPENSATION**

As of March 31, 2025, the Company had an active stock-based incentive compensation plan and an employee stock purchase plan: the 2022 Equity Incentive Plan (the "2022 Plan") and the 2022 Employee Stock Purchase Plan (the "ESPP"). All new equity compensation grants are issued under these two plans; however, outstanding awards previously issued under inactive plans will continue to vest and remain exercisable in accordance with the terms of the respective plans.

The 2022 Plan provides for the grant of stock and stock-based awards including stock options, restricted stock, restricted stock units, performance awards, and stock appreciation rights. As of March 31, 2025, there were approximately 174,000 shares available for grant under the 2022 Plan and approximately 43,000 shares available for grant under the ESPP.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***Stock-Based Compensation Expense***

Total stock-based compensation expense recognized in the Company's condensed consolidated statements of operations is classified as follows:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Cost of revenue | $105734 | $125632 |
| Research and development | 93425 | 139050 |
| Selling and marketing | 196488 | 80925 |
| General and administrative | 101517 | 268508 |
| &nbsp;&nbsp;Total stock-based compensation expense | $497164 | $614115 |

---

The Company's stock-based compensation expense is based on the value of the portion of stock-based payment awards that are ultimately expected to vest. During the three months ended March 31, 2025 and 2024, stock-based compensation relating to stock-based awards granted to consultants was $219,316 and $69,800, respectively.

***Restricted Stock Units***

The Company grants Restricted Stock Units ("RSUs") to its employees for their services with a liquidity event requirement. The RSUs granted to employees vest over a period of time from the grant date and are subject to the participants continuing service to the Company over the period. The following table shows a summary of the Company's RSUs outstanding as of March 31, 2025 and December 31, 2024 as well as activity the year then ended:

---

| | | |
|:---|:---|:---|
|  | **RSUs** | **RSUs** |
|  | **Number of Shares** | **Weighted Average Grant Date Fair Value** |
| Unvested at December 31, 2024 | 4562 | $223.07 |
| &nbsp;&nbsp;RSUs vested <sup>(1)</sup> | (1040) | $208.51 |
| &nbsp;&nbsp;RSUs forfeited | (275) | $36.42 |
| Unvested at March 31, 2025 | 3247 | $243.54 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Common stock underlying such vested RSUs was not yet formally issued by the Company.

The total grant date fair value of RSUs vested was $216,846 and $240,090 during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, total unrecognized stock-based compensation costs related to RSUs were $787,329, which are expected to be recognized over a remaining weighted average period of 0.52 years. As of March 31, 2025, all of the outstanding RSUs are expected to vest.

***Stock Options***

The Company's outstanding stock options generally expire 10 years from the date of grant and are exercisable when the options vest, generally over four years, the majority of which vest at a rate of 25% on the first anniversary of the grant date, with the remainder vesting ratably each month over the next three years. A summary of stock option activity is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Stock Options Outstanding** | **Weighted-Average Exercise Price** | **Weighted-Average Remaining Contractual Life (Years)** | **Aggregate Intrinsic Value** |
| Options outstanding at December 31, 2024 | 218430 | $40.80 | 7.1 | $7375.15 |
| &nbsp;&nbsp;Options cancelled or forfeited | (31492) | $10.14 |  |  |
| Options outstanding at March 31, 2025 | 186938 | $45.96 | 4.0 | $— |
| Options exercisable at March 31, 2025 | 122446 | $58.39 | 2.4 | $— |
| Options vested and expected to vest at March 31, 2025 | 186938 | $45.96 | 4.0 | $— |

---

The weighted-average grant date fair value of options granted to employees and consultants was nil and $0.17 per share for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, total unrecognized stock-based compensation cost related to stock options was $570,832, which is expected to be recognized over a weighted-average period of 2.13 years.

------

[**<u>**Table of Contents**</u>**](#toc_page)

The Company estimates the fair value of the options utilizing the Black-Scholes option pricing model, which is subjective and dependent upon several variables, including expected option term, expected volatility of the Company's share price over the expected term, expected risk-free interest rate over the expected option term, and expected dividend yield rate over the expected option term, and actual forfeiture rates. A summary of the weighted-average assumptions the Company utilized for option grants during the three months ended March 31, 2025 and 2024, respectively, are as follows:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Expected term (in years) | N/A | 4.0 |
| Expected volatility | N/A | 47.8% |
| Risk-free interest rate | N/A | 4.0% |
| Expected dividend yield | N/A | 0.0% |

---

*Common Stock Issued for Services*

During the three months ended March 31, 2025, the Company entered into arrangements with non-employee consultants for services to be provided in exchange for the issuance of shares of the Company's common stock. As of March 31, 2025, the Company was required to but had not yet issued a total of 3,830,189 shares of common stock, (i) 1,000,000 of which were equity-classified, with 500,000 of those shares relating to services previously provided and the remaining 500,000 shares relating to services to be provided over the term of the agreements, and (ii) 2,830,189 of which were liability-classified.

Stock-based compensation expense for the equity-classified awards was recognized based on the fair value of the Company's common stock on the date of grant over the requisite service period. For the three months ended March 31, 2025, a total of $136,384 of stock-based compensation expense was recognized for the equity classified awards. Additionally, $131,000 was recorded within prepaid expenses and other current assets for common stock issued for services not yet performed.

The liability-classified awards represented compensation for services to be provided over the term of the agreements and were measured based on a fixed monetary value to be paid to the non-employee consultants which will be settled by the issuance of a variable number of shares of common stock. As of and for three months ended March 31, 2025, the Company recorded stock-based compensation expense, along with a corresponding liability of $51,073, which is included in accrued expenses in the condensed consolidated balance sheet.

**NOTE 12. INCOME TAX**

Due to its current operating losses, the Company recorded zero income tax expense during the three months ended March 31, 2025 and 2024. During these periods, the Company's activities were limited to U.S. federal and state tax jurisdictions, as it does not have any significant foreign operations.

Due to the Company's history of cumulative losses and after considering all the available objective evidence, management concluded that it is not more likely than not that all of the Company's net deferred tax assets will be realized in the future. Accordingly, the Company's deferred tax assets, which include net operating loss ("NOL") carryforwards and tax credits related primarily to research and development, continue to be subject to a valuation allowance as of March 31, 2025. The Company expects to continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets.

Utilization of the NOL carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions. Generally, in addition to certain entity reorganizations, the limitation applies when one or more "5-percent stockholders" increase their ownership, in the aggregate, by more than 50 percentage points over a 36-month time period testing period, or beginning the day after the most recent ownership change, if shorter. The Company has determined that a Section 382 change in ownership occurred during 2023. As a result of this change in ownership, we expect that certain of the Company's NOLs may not be utilized in the future to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. However, due to the full valuation allowance recorded as of March 31, 2025, the limitation does not affect the Company's results of operations for the periods presented.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**NOTE 13. NET LOSS PER SHARE**

Diluted earnings per share ("EPS") includes the dilutive effect of Common Stock equivalents and is computed using the weighted-average number of Common Stock and Common Stock equivalents outstanding during the reporting period. Diluted EPS for the three months ended March 31, 2025 and 2024 excluded Common Stock equivalents because the effect of their inclusion would be anti-dilutive or would decrease the reported loss per share. The following table sets forth securities outstanding that could potentially dilute the calculation of diluted earnings per share:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Stock options outstanding | 186938 | 171170 |
| Junior Note Warrants | 859315 | 550000 |
| Public Warrants | 417770 | 417770 |
| June 2023 Senior Note Warrants | 335210 | 335210 |
| August 2024 Warrants Issued with Junior Notes | 19892 |  |
| Unvested restricted stock units | 3247 | 21778 |
| If-converted Common Stock from Series A Preferred Stock<sup>(1)</sup> | 119445 | 151945 |
| If-converted Common Stock from convertible notes |  | 335661 |
| &nbsp;&nbsp;Total | 1941817 | 1983534 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Related to the three months ended March 31, 2024, assumed that all shares of Series A Preferred Stock were converted into Common Stock at a conversion rate equal to $0.25 divided by $5.00, representing the maximum number of shares issuable to holders of Series A Preferred Stock.

**NOTE 14. SEGMENT REPORTING**

Operating segments are defined as components of an entity about which discrete financial information is evaluated regularly by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and assess performance. The Company operates and manages its business as one business segment, which is high-power, high-brightness blue laser technology. Accordingly, the Company has one reportable segment. The Company has a single management team that reports to the Executive Chairman, the Company's CODM, who comprehensively manages the entire Company. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

When evaluating the Company's financial performance, the CODM is regularly provided with more detailed expense information than what is included in the Company's statements of operations. The CODM uses net loss, as reported in the consolidated statements of operations, in evaluating the performance of the segment. Decisions regarding resource allocation are made primarily during the annual budget planning process and reallocated as needed throughout the year. The measure of segment assets is reported on the balance sheets as total assets.

The following table shows a reconciliation of the Company's net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S. GAAP, to the Company's total net loss in the condensed consolidated statements of operations:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Revenue | $— | $93549 |
| Cost of revenue: |  |  |
| &nbsp;&nbsp;Materials | 4593 | 37371 |
| &nbsp;&nbsp;Direct labor | 153116 | 492896 |
| &nbsp;&nbsp;Direct job costs | (33273) | 95384 |
| &nbsp;&nbsp;Overhead | 111281 | 231305 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenue | 235717 | 856956 |
| Gross margin | (235717) | (763407) |
| Operating expenses: |  |  |
| &nbsp;&nbsp;Research and development | 184563 | 766495 |
| &nbsp;&nbsp;Selling and marketing | 543337 | 345590 |
| &nbsp;&nbsp;General and administrative | 2078805 | 2652795 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 2806705 | 3764880 |
| Other segment items <sup>(1)</sup> | (13569003) | (1176811) |
| Segment net loss | $(16611425) | $(5705098) |

---

(1) Other segment items consist of interest income, interest expense, change in fair value of warrant liabilities, change in fair value of derivative liability, change in fair value of debt, loss on extinguishment of debt, gain on sale of intellectual property intangible assets, loss on impairment of inventories, property and equipment and operating lease right-of-use asset, interest expense recognized on remeasurement of preferred stock liability and other loss, net.

**NOTE 15. RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** 

***Restatement Background***

------

[**<u>**Table of Contents**</u>**](#toc_page)

On June 20, 2025, the Company's management, upon the recommendation of the Audit Committee of the Board of Directors, concluded that the Company's previously issued unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2025 should no longer be relied upon due to an error described below, and that such financial statements should be restated. The Company evaluated the materiality of the error both qualitatively and quantitatively in accordance with Staff Accounting Bulletin ("SAB") No. 99, *Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements*, and determined the effect of the correction was material as of and for the three months ended March 31, 2025, and as a result, the Company is restating the unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2025, in accordance with ASC 250, Accounting Changes and Error Corrections.

We have determined that the error was a result of a material weakness in internal control over financial reporting that is reported in management's report on internal control over financial reporting included in Item 4 of this report.

This restatement of the Company's previously issued unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2025 is for the purposes of correcting misstatements for (i) certain assumptions used to calculate the fair value of the Indigo Capital Convertible Notes accounted for under the fair value option that were not appropriate and (ii) the fair value of the Indigo Capital Convertible Notes that was not adjusted to fair value upon conversion into shares of common stock.

The restatement had no impact on total net cash flows from operating, investing or financing activities.

***Condensed Consolidated Balance Sheet***

---

| | | | |
|:---|:---|:---|:---|
|  | **As of March 31, 2025** | **As of March 31, 2025** | **As of March 31, 2025** |
|  | **Originally Reported** | **Indigo Convertible Notes Restatement Adjustment** | **As<br>Restated** |
| **LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT** |  |  |  |
| Current liabilities |  |  |  |
| &nbsp;&nbsp;Current portion of notes payable | $3655568 | $1990256 | $5645824 |
| &nbsp;&nbsp;Total current liabilities | $38297826 | $1990256 | $40288082 |
| Total liabilities | $38299141 | $1990256 | $40289397 |
| Stockholders' Deficit |  |  |  |
| &nbsp;&nbsp;Additional paid-in capital | $98432170 | $601119 | $99033289 |
| &nbsp;&nbsp;Accumulated deficit | $(135428605) | $(2591375) | $(138019980) |
| &nbsp;&nbsp;Total Stockholders' Deficit | $(36987668) | $(1990256) | $(38977924) |

---

***Condensed Consolidated Statement of Operations***

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** |
|  | **Originally Reported** | **Indigo Convertible Notes Restatement Adjustment** | **As<br>Restated** |
| Change in fair value of debt | $28997 | $227525 | $256522 |
| Loss on issuance of debt | $- | $(707800) | $(707800) |
| Loss on extinguishment of debt | $(3386416) | $(2111100) | $(5497516) |
| Loss before provision for income taxes | $(14020050) | $(2591375) | $(16611425) |
| Net loss | $(14020050) | $(2591375) | $(16611425) |
| Net loss available to common shareholders | $(6698380) | $(2591375) | $(9289755) |
| Net loss per common share, basic and diluted | $(0.20) | $(0.08) | $(0.28) |

---

***Condensed Consolidated Statement of Stockholders' Deficit***

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** |
|  | **Originally Reported** | **Indigo Convertible Notes Restatement Adjustment** | **As<br>Restated** |
| Issuance of Common Stock to extinguish debt - Additional paid-in capital | $3783694 | $601119 | $4384813 |

---

------

[**<u>**Table of Contents**</u>**](#toc_page)

***Condensed Consolidated Statement of Cash Flows***

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** |
|  | **Originally Reported** | **Indigo Convertible Notes Restatement Adjustment** | **As<br>Restated** |
| Net loss | $(14020050) | $(2591375) | $(16611425) |
| Change in fair value of debt | $28997 | $227525 | $256522 |
| Loss on issuance of debt | $- | $(707800) | $(707800) |
| Loss on extinguishment of debt | $(3386416) | $(2111100) | $(5497516) |

---

**NOTE 16. SUBSEQUENT EVENTS**

**May 2025 Financing Transactions** 

The Company entered into a Business Loan and Security Agreement with Agile Capital Funding, LLC and its affiliates ("Agile"), dated as of May 12, 2025, pursuant to which, in exchange for a capital infusion of $500,000, the Company issued to Agile a $525,000 face amount secured promissory note (the "Agile Note"). The Agile Note requires weekly repayments of $27,000 through November 2025, totaling $756,000. The Agile Note is secured by the Company's cash and deposit accounts.

The Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC ("Diagonal"), dated as of May 13, 2025, pursuant to which, in exchange for a capital infusion of $188,000, the Company issued to Diagonal a $227,700 face amount convertible promissory note (the "Diagonal Note"). The Diagonal Note bears interest at 10% and has a maturity date of February 28, 2026. Beginning 180 days after the issuance date, the note may be converted into common stock for a conversion price equal to a discount of 25% to the lowest trading price during the ten days prior to the conversion date. Diagonal also agreed to provide additional tranches of financing during the next twelve months, up to an aggregate of $2,275,000, subject to further agreement between the Company and Diagonal.

The Company entered into a Securities Purchase Agreement with Boot Capital LLC ("Boot"), dated as of May 13, 2025, pursuant to which, in exchange for a capital infusion of $94,000, the Company issued to Boot a $110,000 face amount convertible promissory note (the "Boot Note" and collectively with the Agile Note and Diagonal Note, the "Notes"). The Boot Note bears interest at 10% and has a maturity date of February 28, 2026. Beginning 180 days after the issuance date, the note may be converted into common stock for a conversion price equal to a discount of 25% to the lowest trading price during the ten days prior to the conversion date.

The Notes are subordinate to the currently outstanding Series A Preferred Stock, solely with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution, or winding up of the Company. Issuances of common stock on conversion of the Diagonal Note and the Boot Note are limited to an amount equal to 19.9% of the outstanding common stock as of the date of execution, until such time as the transaction is approved by stockholders.

The foregoing transaction documents contain customary representations, warranties, and covenants, including customary events of default including, but not limited to, failure to pay amounts due when required, default in covenants, and bankruptcy events.

**NYSE Regulation Notice of Noncompliance**

On April 29, 2025, the Company received a Notice of Noncompliance (the "Notice") from NYSE Regulation indicating that the Company was not in compliance with Section 1003(a)(i) of the NYSE American LLC Company Guide (the "Company Guide"), which requires a company to maintain stockholders' equity of $2.0 million or more if it has reported losses from continuing operations or net losses in two of its three most recent fiscal years. The Notice has no immediate effect on the listing or trading of the Company's securities and the Company's common stock will continue to trade on the NYSE American under the symbol "BURU" with the designation of ".BC" to indicate that the Company is not in compliance with the NYSE American's continued listing standards.

As required by the Company Guide, the Company will submit a detailed plan by May 29, 2025, advising of actions it has taken or will take to regain compliance with the continued listing standards by the compliance deadline of October 29, 2026. If NYSE Regulation determines to accept the plan, the Company will be subject to periodic reviews, including quarterly monitoring for compliance. If the plan is not accepted, or the Company does not make progress under the plan during the plan period, NYSE may commence delisting proceedings. However, the Company is entitled to appeal a staff delisting determination in accordance with the Company Guide.

The Company believes that, upon consummation of certain of the transactions that it has recently announced, it will be able to regain compliance. However, such transactions are subject to regulatory approvals, stockholder approval, and other closing conditions and, as a result, may not be consummated. Even if consummated, such transactions may not achieve the anticipated results or benefits to the Company.

**April 2025 Indigo Transactions**

The Company entered into the following transactions on April 22, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in exchange for a capital infusion of $1,350,000, the Company issued to Indigo Capital a $1,421,053 face amount unsecured, convertible note. The note bears no interest for so long as it is not in default and has an April 21, 2026 maturity date and a conversion price equal to the lowest VWAP during the 5 days prior to the conversion date;

------

[**<u>**Table of Contents**</u>**](#toc_page)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in exchange for the extinguishment of an existing unsecured promissory note of the Company with a $2,003,097 face amount, the Company issued to Indigo Capital a $2,108,523.16 face amount unsecured, convertible note that bears no interest for so long as it is not in default, and has an April 21, 2026 maturity date and a conversion price equal to the lowest VWAP during the 5 days prior to the conversion date.

Both notes are subordinate to the currently outstanding Series A Preferred Stock, solely with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Issuances of common stock on conversion of such notes are limited to an amount equal to 19.9% of the outstanding common stock as of the date of execution, until such time as the transaction is approved by stockholders.

The transaction documents contain customary representations, warranties, and covenants, and the notes include customary events of default including, but not limited to, failure to pay amounts due when required, default in covenants, bankruptcy events, and suspension or delisting from trading of the common stock on an eligible exchange. The Company is also obligated to register for resale the shares issuable upon conversion of the notes.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYS** **IS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The interim financial statements included in this Quarterly Report and this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in the Annual Report filed with the SEC on April 15, 2025, as subsequently amended by the Form 10-K/A filed with the SEC on April 30, 2025 and the Form 10-K/A filed with the SEC on May 20, 2025 (as amended, the "Annual Report"). In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are subject to risks and uncertainties, including those under "Risk Factors" in this Quarterly Report and our Annual Report that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.*

*Unless otherwise indicated, references in this section to "Nuburu," "we," "us," "our" and the "Company" refer to Nuburu, Inc. and its consolidated subsidiary, Nuburu Subsidiary, Inc.*

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

As we have disclosed previously, we have not yet achieved commercialization and expect continued losses until we can do so. We must rely on capital from investors to support our operations. During 2024 and early 2025, management negotiated several funding agreements with multiple investors. Certain of these investors have not fully performed their obligations under such agreements and the Company's operations have consumed more cash than it has been able to generate or raise. As a result, the Company has not received the funding necessary to maintain operations or implement its business plan. Given the lack of funding, management initiated measures designed to reduce costs, which included implementing a furlough of employees. In response to the furloughs and financing challenges, several key employees have resigned entirely.

We generated total revenue of nil and $93,549 and had net losses of $16,611,425 and $5,705,098 during the three months ended March 31, 2025 and 2024, respectively. The operating loss for the three months ended March 31, 2025 included $10,398,050 of non-cash interest expense recognized on remeasurement of preferred stock liability. For additional information on this interest expense see Note 9 to the condensed consolidated financial statements.

We expect to incur significant expenses and operating losses for the foreseeable future, as we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•devote substantial resources to implement our Transformation Plan (as defined below) and related acquisitions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•operate as a public company.

Accordingly, we may seek to fund our operations through public or private equity financings, debt financings or other sources. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition.

**Recent Developments and Financing Transactions**

In its Notification of Late Filing on Form 12b-25 filed on May 16, 2025, the Company indicated that it may need to issue a restatement of previously issued financial information, and such previously issued financial statements could no longer be relied upon, to account for expenses and general and administrative expenses relating to: (i) $64,800 related to finder fee payments; and (ii) $500,000 related to an engagement letter executed by the Company for professional services. Subsequently, it was determined that a restatement would not be required and these matters had been appropriately considered and accounted for in its previously issued financial statements and such previously issued financial statements can be relied upon.

***Inventory, Property and Equipment and Right-of-Use Asset Impairment***

The Company leased approximately 27,900 square feet of office space in Centennial, Colorado, with a lease term through June 2025. Consistent with the Company's previously disclosed business plan for its future business, the Company does not believe that assets or equipment that remain on this leased property are critical to its new business strategy, given that it will not be conducting full-scale manufacturing or laser design or development that would involve the prior patent portfolio, which was transferred to its former secured lenders. The Company is pursuing a lease for a replacement facility that is more appropriate for the Company's new business strategy, which will involve laser development in different verticals and outsourcing of manufacturing and inventory management. However, entering into a new lease and appropriately equipping a new facility is costly and time-consuming and may cause delays in the Company's progress with respect to the business plan focused on building a stable foundation for its future business.

As of March 31, 2025, the Company was in default under the lease, and the Landlord was in the process of pursuing available remedies in advance of the lease term that would otherwise expire in June 2025. In April 2025, the Landlord obtained a default judgment against the Company in the amount of $409,278. The Landlord may exercise rights under the lease agreement and applicable law with respect to a lessee in default and such lessee's assets located on the premises, including the removal and disposal of inventories and property and equipment remaining on the property. As such, as of March 31, 2025, the Company determined that, based on the assumption that the Landlord would fully exercise its rights with respect to all assets remaining on the premises, (i) it no longer had control over the inventory and that recovery was not probable, therefore, inventory was written down to a net realizable value of zero, (ii) the carrying value of its property and equipment, all of which was at the leased location, was no longer recoverable, and the assets were written down to a net book value of $0, and (iii) the right-of-use asset associated with this lease was fully impaired, as the Company could no longer use the leased premises, each of which is recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***NYSE Regulation Notice of Noncompliance***

On April 29, 2025, the Company received a Notice of Noncompliance (the "Notice") from NYSE Regulation indicating that the Company was not in compliance with Section 1003(a)(i) of the NYSE American LLC Company Guide (the "Company Guide"), which requires a company to maintain stockholders' equity of $2.0 million or more if it has reported losses from continuing operations or net losses in two of its three most recent fiscal years. The Notice has no immediate effect on the listing or trading of the Company's securities and the Company's common stock will continue to trade on the NYSE American under the symbol "BURU" with the designation of ".BC" to indicate that the Company is not in compliance with the NYSE American's continued listing standards.

As required by the Company Guide, the Company will submit a detailed plan by May 29, 2025, advising of actions it has taken or will take to regain compliance with the continued listing standards by the compliance deadline of October 29, 2026. If NYSE Regulation determines to accept the plan, the Company will be subject to periodic reviews, including quarterly monitoring for compliance. If the plan is not accepted, or the Company does not make progress under the plan during the plan period, NYSE may commence delisting proceedings. However, the Company is entitled to appeal a staff delisting determination in accordance with the Company Guide.

The Company believes that, upon consummation of certain of the transactions that it has recently announced, it will be able to regain compliance. However, such transactions are subject to regulatory approvals, stockholder approval, and other closing conditions and, as a result, may not be consummated. Even if consummated, such transactions may not achieve the anticipated results or benefits to the Company.

***NYSE American Delisting and Reinstatement***

On June 13, 2024, NYSE American LLC announced that it had determined to commence proceedings to delist our Common Stock. Trading of our stock on NYSE American was immediately suspended and we commenced trading on the over-the-counter market.

On July 29, 2024, we received a notification from NYSE American informing us that we had resolved the continued listing deficiency with respect to low selling price as described in Section 1003(f)(v) of the NYSE American Company Guide. As a result, the staff of NYSE Regulation withdrew its delisting determination and lifted the trading suspension on Nuburu's Common Stock. The Common Stock re-commenced trading on NYSE American on Friday, August 2, 2024 under the symbol "BURU."

***Reverse Stock Split***

On February 22, 2024, we held a special meeting of stockholders where stockholders approved proposals to authorize the Company to effect a reverse stock split of the Company's issued and outstanding Common Stock within a range from 1-for 30 to 1-for-75, with the exact ratio of the reverse stock split to be determined by the Company's board of directors. On July 23, 2024, the Company effected a 1-for-40 reverse stock split (the "Reverse Stock Split").

***SFE EI Senior Note Settlement Agreement and Company Funding***

On January 13, 2025, the Company entered into a letter agreement with S.F.E. Equity Investments SARL ("SFE EI"), pursuant to which SFE EI agreed to engage in efforts and commit capital to finance the operations of the Company for the next twelve months pursuant to the Transformation Plan. In connection with the Transformation Plan, the Company agreed to certain governance changes.

***Trumar Commitment Letter***

On February 19, 2025, the Company entered into a commitment letter with Trumar Capital LLC ("TCEI") to acquire: (i) a license of certain technology that would allow the Company to expand its existing business within the defense sector; (ii) a controlling interest in a defense-tech company that specializes in the design, production, and outfitting of a diverse range of vehicles, including industrial and military applications, as well as electronic devices for defense and security, advanced telecommunications, and tracking systems; and (iii) a controlling interest in a Software as a Service (SaaS) startup focused on operational resilience.

The anticipated investments will occur in stages. The first stage, which has been completed, involved the purchase of a 20% ownership interest in TCEI for an aggregate price of $1.5 million in cash plus $23.5 million in notes.

On March 31, 2025, the Company also entered into a Joint Pursuit Agreement with the defense-tech company to allow both parties to jointly develop and market certain defense-related vehicles and services in advance of closing the full TCEI acquisition.

For additional information, see Note 6 to the condensed consolidated financial statements.

***Convertible Note Receivable***

On March 14, 2025, the Company entered into a convertible facility with capacity of up to $5.15 million (the "Convertible Note Receivable") with Supply@ME Capital Plc ("SYME"), a fintech platform focused on Inventory Monetisation© solutions for manufacturing and trading companies, of which $150,000 was funded under the Convertible Note Receivable as of March 31, 2025, with full funding expected to occur by the end of the third quarter of 2025. For additional information, see Note 5 to the condensed consolidated financial statements.

***Liqueous Settlement Agreement***

In January 2025 and April 2025, in connection with a settlement and mutual release agreement entered into between the Company and Liqueous LP ("Liqueous") (the "Liqueous Settlement Agreement"), as amended, the parties provided an immediate mutual release of claims and obligations through payments from Liqueous to the Company in an aggregate $1,450,000, of which $1,000,000 was paid during the first quarter of 2025. For additional information, see Note 6 to the condensed consolidated financial statements.

In February 2025, in connection with the Liqueous Settlement Agreement, as amended, the Company agreed to (i) modify 665,410 outstanding equity-classified Pre-Funded Warrants issued in connection with its Pre-Funded Warrant Purchase Program during 2024, resulting in the issuance of 3,647,416 equity-classified pre-funded warrants outstanding immediately after the modification exercisable into common stock and (ii) modify the remaining 171,706 outstanding

------

[**<u>**Table of Contents**</u>**](#toc_page)

equity-classified Pre-Funded Warrants issued in connection with the Program during 2024, resulting in 9,360,888 pre-funded warrants outstanding immediately after the modification that were concurrently exercised into 9,360,888 common shares of the Company for no additional cash consideration, as the modified pre-funded warrants had a nominal exercise price (the "Pre-Funded Warrants Modification"). For additional information, see Note 10 to the condensed consolidated financial statements.

In March 2025, the 3,647,416 outstanding warrants were exercised into 3,647,416 shares of common stock for no additional cash consideration, as the pre-funded warrants had a nominal exercise price.

In February 2025, in connection with the Liqueous Settlement Agreement, as amended, the Company agreed to issue 6,406,225 pre-funded warrants exercisable into common stock, which included a nominal exercise price, to extinguish the Liqueous Promissory Note, as defined and described in Note 8 to the condensed consolidated financial statements. As the pre-funded warrants were not yet issued as of March 31, 2025, the Company continued to remain legally obligated under the terms of the Liqueous Promissory Note. In April 2025, through an additional amendment to the Liqueous Settlement Agreement, the Company settled the Liqueous Promissory Note through the issuance of 9,090,959 shares of common stock.

***April 2025 Indigo Transactions***

The Company entered into the following transactions on April 22, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in exchange for a capital infusion of $1,350,000, the Company issued to Indigo Capital LP ("Indigo Capital") a $1,421,053 face amount unsecured, convertible note. The note bears no interest for so long as it is not in default and has an April 21, 2026 maturity date and a conversion price equal to the lowest VWAP during the 5 days prior to the conversion date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in exchange for the extinguishment of an existing unsecured promissory note of the Company with a $2,003,097 face amount, the Company issued to Indigo Capital a $2,108,523.16 face amount unsecured, convertible note that bears no interest for so long as it is not in default, and has an April 21, 2026 maturity date and a conversion price equal to the lowest VWAP during the 5 days prior to the conversion date.

For additional information, see Note 15 to the condensed consolidated financial statements.

***May 2025 Financing Transactions*** 

The Company entered into a Business Loan and Security Agreement with Agile Capital Funding, LLC and its affiliates ("Agile"), dated as of May 12, 2025, pursuant to which, in exchange for a capital infusion of $500,000, the Company issued to Agile a $525,000 face amount secured promissory note (the "Agile Note"). The Agile Note requires weekly repayments of $27,000 through November 2025, totaling $756,000. The Agile Note is secured by the Company's cash and deposit accounts.

The Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC ("Diagonal"), dated as of May 13, 2025, pursuant to which, in exchange for a capital infusion of $188,000, the Company issued to Diagonal a $227,700 face amount convertible promissory note (the "Diagonal Note"). The Diagonal Note bears interest at 10% and has a maturity date of February 28, 2026. Beginning 180 days after the issuance date, the note may be converted into common stock for a conversion price equal to a discount of 25% to the lowest trading price during the ten days prior to the conversion date. Diagonal also agreed to provide additional tranches of financing during the next twelve months, up to an aggregate of $2,275,000, subject to further agreement between the Company and Diagonal.

The Company entered into a Securities Purchase Agreement with Boot Capital LLC ("Boot"), dated as of May 13, 2025, pursuant to which, in exchange for a capital infusion of $94,000, the Company issued to Boot a $110,000 face amount convertible promissory note (the "Boot Note" and collectively with the Agile Note and Diagonal Note, the "May 2025 Notes"). The Boot Note bears interest at 10% and has a maturity date of February 28, 2026. Beginning 180 days after the issuance date, the note may be converted into common stock for a conversion price equal to a discount of 25% to the lowest trading price during the ten days prior to the conversion date.

The May 2025 Notes are subordinate to the currently outstanding Series A Preferred Stock, solely with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution, or winding up of the Company. Issuances of common stock on conversion of the Diagonal Note and the Boot Note are limited to an amount equal to 19.9% of the outstanding common stock as of the date of execution, until such time as the transaction is approved by stockholders.

The foregoing transaction documents contain customary representations, warranties, and covenants, including customary events of default including, but not limited to, failure to pay amounts due when required, default in covenants, and bankruptcy events. For additional information, see Note 16 to the condensed consolidated financial statements.

***Note Extinguishments*— *Junior Notes***

During the three months ended March 31, 2025, the Company issued 9,186,581 shares to noteholders to extinguish an aggregate $411,865 of principal and accrued interest under the Junior Notes. The reacquisition value of the debt was higher than the related carrying value, and thus resulted in an aggregate net loss on extinguishment of debt of $1,174,519 recorded in the condensed consolidated statement of operations.

***Note Extinguishments*— *August 2024 Convertible Notes***

------

[**<u>**Table of Contents**</u>**](#toc_page)

During the three months ended March 31, 2025, the Company issued 1,878,620 shares to Esousa to extinguish an aggregate $389,375 of principal and accrued interest under the August 2024 Convertible Notes. The reacquisition value of the debt was higher than the related carrying value, and thus resulted in an aggregate net loss on extinguishment of debt of $480,399 recorded in the condensed consolidated statement of operations.

In March 2025, the remaining August 2024 Convertible Notes were purchased by Indigo Capital and subsequently extinguished, as further described below. The transaction resulted in a loss on extinguishment of debt of $2,281,503 associated with the extinguishment of these notes.

***Note Extinguishments*— *Foreclosure Collateral Sale***

On March 5, 2025, as part of the Foreclosure, the lenders holding the outstanding Senior Convertible Notes held an auction for the sale of collateral securing the Company's repayment obligations, which resulted in such lenders taking possession of such collateral in exchange for a full discharge and extinguishment of the Company's $8,961,872 of indebtedness with respect to the Junior Notes and Senior Convertible Notes, as well as a loss on extinguishment of the Senior Convertible Notes of $1,682,641, of which $27,139 of this loss relates to related parties. The extinguishment of the Junior Notes did not result in a gain or loss on extinguishment as the proceeds deemed to be received by the holders of the Junior Notes in connection with the Foreclosure approximated the carrying value of the Junior Notes and all issuance costs were fully amortized. The loss on extinguishment of the Senior Convertible Notes is included within loss on extinguishment of debt within the condensed consolidated statement of operations for the three months ended March 31, 2025.

***Indigo Capital Convertible Notes***

On March 3, 2025, the Company entered into the following transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in exchange for a capital infusion of $1,500,000, the Company issued to Indigo Capital a $1,578,495 face amount unsecured, convertible note. The note bears no interest for so long as it is not in default and has a March 1, 2026 maturity date and a conversion price equal to a 20% discount to the lowest VWAP during the 5 days prior to the conversion date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in exchange for the extinguishment of existing senior convertible notes of the Company held by Indigo Capital, the Company issued to Indigo Capital a $894,708 face amount unsecured, convertible note that bears no interest for so long as it is not in default, and has March 1, 2026 maturity date and a conversion price equal to 33.33% of the lowest VWAP during the 5 days prior to the conversion date.

Issuances of common stock on conversion of such notes are limited to an amount equal to 19.9% of the outstanding common stock as of the date of execution, until such time as the transaction is approved by stockholders.

The transaction documents contain customary representations, warranties, and covenants, and the notes include customary events of default including, but not limited to, failure to pay amounts due when required, default in covenants, bankruptcy events, and suspension or delisting from trading of the common stock on an eligible exchange. The Company is also obligated to register for resale the shares issuable upon conversion of the notes.

***Master Agreement with Liqueous***

On October 1, 2024, the Company entered into the Master Agreement with Liqueous pursuant to which, the Company and Liqueous established a strategic financing framework for short-term and long-term financing for the Company. The Master Agreement provided for: (i) an immediate capital infusion from Liqueous of $3.0 million at the current market price, (ii) subsequent weekly capital infusions of $1,250,000 at market price until an additional $10 million has been invested; (iii) the acquisition and conversion of certain outstanding notes, with each $1.00 of debt converted into $2.00 of common stock at market price; (iv) an adjustment to current market price of certain outstanding pre-funded warrants held by Liqueous having a current cash value of approximately $2.2 million; and (v) the implementation of a $50 million equity line of credit ("ELOC") pursuant to which the Company may require Liqueous to purchase common stock from time-to-time in the amounts and for the prices determined in accordance with the terms of the ELOC. Following the Liqueous Settlement Agreement, as amended, the ELOC will not be implemented and no additional equity will be sold to Liqueous, other than as set forth in the Liqueous Settlement Agreement, as amended.

**Components of Statements of Operations**

***Revenue***

Revenue consists of revenue recognized from sales and installation services of high-powered lasers. We have customers in the United States, Europe and Asia. In all sales arrangements, revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.

***Cost of Revenue***

Cost of revenue primarily consists of the cost of materials, overhead and employee compensation associated with the manufacturing of our high-powered lasers. Product cost also includes lower of cost or net realizable value inventory ("LCNRV") adjustments if the carrying value of the inventory is greater than its net realizable value as well as adjustments for excess or obsolete inventory.

***Operating Expenses***

As described above, during 2024, management initiated measures designed to reduce costs, which included implementing a furlough of employees. This significantly impacted commercialization and operations, particularly in the second half of 2024 and early 2025.

------

[**<u>**Table of Contents**</u>**](#toc_page)

*Research and Development*

Research and development expenses consist primarily of compensation and related costs for personnel, including stock-based compensation, employee benefits, training, travel, third-party consulting services, laboratory supplies, and research and development equipment depreciation incurred to further our commercialization development efforts. We expense research and development costs as incurred. We anticipate research and development expenses to increase significantly as we expand our product portfolio.

*Selling and Marketing*

Selling and marketing expenses consist primarily of compensation and related costs for our direct sales force, sales management, and marketing and include stock-based compensation, employee benefits, and travel for selling and marketing employees as well as costs related to trade shows, marketing programs. third-party consulting expenses, and application lab depreciation expenses. We expense selling and marketing costs as incurred. We expect selling and marketing expenses to increase in future periods as we expand our sales force, marketing, and customer support organizations and increase our participation in trade shows and marketing programs.

*General and Administrative*

Our general and administrative expenses consist primarily of compensation and related costs for our finance, human resources and other administrative personnel, and include stock-based compensation, employee benefits and travel expenses. In addition, general and administrative expenses include our third-party consulting and advisory services, legal, audit, accounting services and facilities costs. We expect our general and administrative expenses to increase for the foreseeable future as we scale headcount with the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

***Interest Income***

Interest income consists primarily of interest income received on our cash and cash equivalents.

***Interest Expense***

Interest expense consists primarily of interest owed on our outstanding debt and amortization of deferred financing costs, as further described in Note 8 in the condensed consolidated financial statements included in Item 1 of this Quarterly Report.

***Change in Fair Value of Warrant Liabilities***

Change in fair value of warrant liabilities consists of non-cash gains or losses recognized based on the change in the fair value of our liability-classified warrants, which are re-measured to fair value at each balance sheet date with the corresponding gain or loss from the adjustment. Refer to Notes 4 and 10 in the condensed consolidated financial statements included in Item 1 of this Quarterly Report for more information.

***Change in Fair Value of Derivative Liability***

Change in fair value of derivative liability consists of non-cash gains or losses recognized based on the change in the fair value of the embedded derivatives under the August 2024 Convertible Notes that were required to be bifurcated from the host instrument and accounted for at fair value at issuance, as well as each subsequent balance sheet date. Refer to Notes 4 and 8 in the condensed consolidated financial statements included in Item 1 of this Quarterly Report for more information.

***Change in Fair Value of Debt***

Change in fair value of debt relates to the unrealized gain or loss resulting from the change in fair value of debt instruments for which the fair value option has been elected. This amount reflects the remeasurement of such liabilities to their current fair value as of the reporting date.

***Loss on Extinguishment of Debt***

Loss on extinguishment of debt consists of losses incurred to extinguish debt during the periods presented due to (i) the reacquisition value of the debt exceeding its carrying amount and (ii) the sale of collateral. Refer to Note 8 in the condensed consolidated financial statements included in Item 1 of this Quarterly Report for more information.

***Gain on Sale of Intellectual Property Intangible Assets***

Gain on sale of intellectual property intangible assets primarily relates to the sale of collateral to the lenders holding both the outstanding Senior Convertible Notes and Junior Notes in exchange for a full discharge and extinguishment of the Company's Junior Notes and Senior Convertible Notes, as further described in Note 8 in the condensed consolidated financial statements.

***Loss on Impairment of Inventories, Property and Equipment and Operating Lease Right-of-Use Asset***

Loss on impairment of inventories, property and equipment and operating lease right-of-use asset relates to write-downs and impairments recorded on the Company's inventories, property and equipment and right-of-use-asset in connection with the Company's default under its lease, and ultimate judgment obtained by the Landlord, in April 2025. For additional information, see Notes 1, 3 and 6 to the condensed consolidated financial statements.

***Interest Expense Recognized on Remeasurement of Preferred Stock Liability***

Interest expense recognized on remeasurement of preferred stock liability relates to the subsequent remeasurement of the preferred stock liability after issuance through March 31, 2025 in connection with the reclassification of the preferred stock from mezzanine equity to a short-term liability on January 31, 2025. For additional information, see Note 9.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Results of Operations**

**Comparison of the three months ended March 31, 2025 and 2024**

The following table sets forth our operations for the periods presented:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |  |
|  | **2025** | **2024** | **$ Change** |
|  | **(As Restated)** |  |  |
| Revenue | $— | $93549 | $(93549) |
| Cost of revenue | 235717 | 856956 | (621239) |
| Gross margin | (235717) | (763407) | 527690 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;Research and development | 184563 | 766495 | (581932) |
| &nbsp;&nbsp;Selling and marketing | 543337 | 345590 | 197747 |
| &nbsp;&nbsp;General and administrative | 2078805 | 2652795 | (573990) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 2806705 | 3764880 | (958175) |
| Loss from operations | (3042422) | (4528287) | 1485865 |
| Non-operating expenses: |  |  |  |
| &nbsp;&nbsp;Interest income | 7385 | 11740 | (4355) |
| &nbsp;&nbsp;Interest expense | (193480) | (1191862) | 998382 |
| &nbsp;&nbsp;Change in fair value of warrant liabilities | 127300 | 3311 | 123989 |
| &nbsp;&nbsp;Change in fair value of derivative liability | 37900 |  | 37900 |
| &nbsp;&nbsp;Change in fair value of debt | 256522 |  | 256522 |
| &nbsp;&nbsp;Loss on issuance of debt | (707800) |  | (707800) |
| &nbsp;&nbsp;Loss on extinguishment of debt | (5497516) |  | (5497516) |
| &nbsp;&nbsp;Gain on sale of intellectual property intangible assets | 8961872 |  | 8961872 |
| &nbsp;&nbsp;Loss on impairment of inventories, property and equipment and operating lease right-of-use asset | (6064823) |  | (6064823) |
| &nbsp;&nbsp;Interest expense recognized on remeasurement of preferred stock liability | (10398050) |  |  |
| &nbsp;&nbsp;Other loss, net | (98313) |  | (98313) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss before provision for income taxes | $(16611425) | $(5705098) | $(508277) |
| &nbsp;&nbsp;Provision for income taxes |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(16611425) | $(5705098) | $(508277) |

---

***Revenue.*** Revenue decreased $93,549 during the three months ended March 31, 2025 compared to the same period in 2024. This decrease is primarily due to the measures implemented by management during 2024 and continued into the first quarter of 2025, designed to reduce costs, which included implementing a furlough of employees that significantly impacted commercialization and operations.

***Cost of Revenue.*** Cost of revenue decreased $621,239 during the three months ended March 31, 2025 compared to the same period in 2024. This decrease is primarily due to a period-over-period decrease of approximately $468,000 of direct labor and job costs and $120,000 in overhead due to decreased production of the laser systems related to the measures implemented by management during 2024 designed to reduce costs, which included implementing a furlough of employees that significantly impacted commercialization and operations and has had a continued impact into the first quarter of 2025.

***Research and Development.*** Research and development expenses decreased $581,932 during the three months ended March 31, 2025 compared to the same period in 2024.This decrease is primarily due to (i) approximately $447,000 of lower personnel costs due to the furlough of research and development employees as part of the cost reduction measures instituted by management which primarily began during the second quarter of 2024 and (ii) approximately $89,000 of lower spend on the BL<sup>TM</sup> series.

***Selling and Marketing.*** Selling and marketing expenses increased $197,747 during the three months ended March 31, 2025 compared to the same period in 2024. This increase is primarily due to (i) an increase in professional and consulting related expenses of $230,000, partially offset by (ii) a decrease in payroll costs of approximately $48,000, which includes a partially offsetting increase of share-based compensation expense of approximately $116,000 related primarily to shares granted to non-employee consultants for services, due to the furlough of employees as part of the cost reduction measures instituted by management which primarily began during the second quarter of 2024.

***General and Administrative.*** General and administrative expenses decreased $573,990 during the three months ended March 31, 2025 compared to the same period in 2024. This decrease is primarily driven by (i) a decrease in payroll costs of $512,000, including a decrease of approximately $167,000 of share-based compensation expense, due to the cost reduction measures instituted by management in the second half of 2024, as well as (ii) a decrease in professional and consulting related expenses of $233,000, partially offset by (iii) an increase in depreciation expense of approximately $231,000.

***Interest Expense.*** Interest expense decreased $998,382 during the three months ended March 31, 2025 compared to the same period in 2024 primarily due to lower debt balances between periods. Interest expense during the three months ended March 31, 2025 was comprised primarily of interest accrued on the Senior Convertible Notes, Junior Notes and August 2024 Convertible Notes. Refer to Note 8 in the consolidated financial statements included herein for more information on our debt obligations.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***Change in Fair Value of Warrant Liabilities.*** We recorded a gain of $127,300 during the three months ended March 31, 2025, as compared to a gain of $3,311 for the three months ended March 31, 2024. The gain recognized during the three months ended March 31, 2025 largely resulted from a decrease in the Company's share price during the first quarter of 2025.

***Change in Fair Value of Derivative Liability.*** We recorded a gain of $37,900 during the three months ended March 31, 2025, as the August 2024 Convertible Notes were extinguished during the three months ended March 31, 2025. For additional information, see Note 8 to the condensed consolidated financial statements. There was no derivative liability recorded during the three months ended March 31, 2024.

***Change in Fair Value of Debt.*** We recorded a gain of $256,522 during the three months ended March 31, 2025, which resulted from (i) a gain of $132,508 related to the decrease in the fair value of the Indigo Capital Convertible Notes, largely due to a decrease in the Company's share price from the time of the issuance in early March 2025 through March 31, 2025, and (ii) a gain of $124,014 related to the conversion of $307,320 of contractual principal under the Indigo Capital Exchange Convertible Notes, as further defined and described in Note 8 to the condensed consolidated financial statements.

***Loss on Issuance of Debt.*** We recorded a loss of $707,800 during the three months ended March 31, 2025 related to the excess of the initial fair value of $2,207,800 of the Indigo Capital Convertible Note over the proceeds received.

***Loss on Extinguishment of Debt.*** We recorded a loss on the extinguishment of debt of $5,497,516 during the three months ended March 31, 2025, which primarily comprises (i) $2,123,403 related to excess of the initial fair value of $3,003,300 of the Indigo Capital Exchange Convertible Note over the carrying amount of the August 2024 Convertible Notes, (ii) $1,682,641 related to the sale of collateral, further described in Note 8 to the condensed consolidated financial statements, (iii) $1,174,519 related to the issuance of 9,186,581 shares to holders of Junior Notes to extinguish an aggregate $411,865 of principal and accrued interest under the Junior Notes and (iv) $480,399 related to the issuance of 1,878,620 shares to Esousa to extinguish an aggregate $389,375 of principal and accrued interest under the August 2024 Convertible Notes. For further information, see Note 8 to the condensed consolidated financial statements.

***Gain on Sale of Intellectual Property Intangible Assets.*** We recorded a gain on the sale of intellectual property of $8,961,872 during the three months ended March 31, 2025, which primarily related to the sale of collateral to extinguish the remaining outstanding Junior Notes and Senior Convertible Notes, as further described in Note 8 to the condensed consolidated financial statements.

***Loss on Impairment of Inventories, Property and Equipment and Operating Lease Right-of-Use Asset.*** We recorded a loss on impairment of inventories, property and equipment and operating lease right-of-use asset of $6,064,823 related to write-downs and impairments recorded on the Company's inventories, property and equipment and right-of-use-asset in connection with the Company's default under its lease, and ultimate judgment obtained by the Landlord, in April 2025. For additional information, see Notes 1, 3 and 6 to the condensed consolidated financial statements.

***Interest Expense Recognized on Remeasurement of Preferred Stock Liability.*** We recorded non-cash **i**nterest expense of $10,398,050 related to the subsequent remeasurement of the preferred stock liability after issuance through March 31, 2025 in connection with the reclassification of the preferred stock from mezzanine equity to a short-term liability on January 31, 2025. For additional information, see Note 9 to the condensed consolidated financial statements.

**Liquidity and Capital Resources**

***Overview***

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations, and other commitments. As of the date of this Quarterly Report, we have yet to generate meaningful revenue from our business operations and have funded capital expenditure and working capital requirements through debt and equity financing.

As of March 31, 2025, we had cash and cash equivalents of $70,937 as compared to $209,337 as of December 31, 2024. During the three months ended March 31, 2025, the Company received cash of $1.5 million from the Indigo Capital Convertible Notes and $1.0 million from the Liqueous Settlement Agreement, and future liquidity may be provided from certain agreements executed subsequent to March 31, 2025, as further described in Note 15 to the condensed consolidated financial statements. Our cash flows from operations are not sufficient to fund our current operating model and expansion plans. As of January 31, 2025, the Company was also required to redeem the Preferred Stock as permitted by law in cash at an amount equal to $10.00 per share, or $23,889,050. Notwithstanding the foregoing, the Company is not required to redeem any shares of Preferred Stock to the extent the Company does not have legally available funds to effect such redemption.

From inception through March 31, 2025, we have incurred operating losses and negative cash flows from operating activities. For the three months ended March 31, 2025 and 2024, we have incurred net losses of $16,611,425 and $5,705,098, respectively, and we have an accumulated deficit of $138,019,980 as of March 31, 2025.

The Company anticipates that it will incur net losses for the foreseeable future and, even if we generate revenue, there is no guarantee that we will ever become profitable. Unless the Company is able to implement its Transformation Plan, all of the aforementioned factors raise substantial doubt about the Company's ability to continue as a going concern.

Until we can generate sufficient revenue to cover our operating expenses, working capital, and capital expenditures, we will rely on private and public capital raising efforts; however, there is no assurance that plans to obtain additional debt or equity financing will be successfully implemented or implemented on terms favorable to the Company.

The further development of our products, commencement of commercial operations and expansion of our business will require a significant amount of cash for expenditures. Our ability to successfully manage this growth will depend on many factors, including our working capital needs, the availability of equity or debt financing and, over time, our ability to generate cash flows from operations.

Given the Company's current liquidity position, the Company will need to raise additional capital. If we raise additional funds by issuing equity securities, this would result in dilution to our stockholders. If we raise additional funds by issuing any additional preferred stock, such securities may also provide for rights, preferences, or privileges senior to those of holders of Common Stock. If we raise additional funds by issuing debt securities, such debt securities would have rights, preferences and privileges senior to those of holders of Common Stock. The terms of debt securities or borrowings could impose significant restrictions

------

[**<u>**Table of Contents**</u>**](#toc_page)

on our operations. The credit market and financial services industry have in the past, and may in the future, experience periods of uncertainty that could impact the availability and cost of equity and debt financing.

***Cash Flows***

The following table summarizes our cash flows from operating, investing and financing activities for the periods presented.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
|  | **2025** | **2024** |
| &nbsp;&nbsp;Net cash used in operating activities | $(1927792) | $(2093442) |
| &nbsp;&nbsp;Net cash used in investing activities | (750000) |  |
| &nbsp;&nbsp;Net cash provided by financing activities | 2539392 | 176627 |

---

***Cash flows from operating activities***

Our cash flows used in operating activities to date have been primarily comprised of costs related to research and development, selling and marketing, and other general and administrative activities. We expect our expenses related to personnel and general and administrative activities to increase as a result of operating as a public company.

Net cash used in operating activities was $1,927,792 and $2,093,442 for the three months ended March 31, 2025 and 2024, respectively. The decrease in net cash flows used in operating activities is primarily driven by decreased operating expenses and changes in working capital, partially offset by a decrease in revenue.

***Cash flows from investing activities***

Our cash flows from investing activities have historically been comprised primarily of purchases of equipment and installation of improvements to our leased facilities and headquarters.

Net cash used in investing activities was $750,000 and nil for the three months ended March 31, 2025 and 2024, respectively. The amount used in investing activities for the three months ended March 31, 2025 relates to $600,000 of cash paid for the deposit on the anticipated acquisition of TCEI, as further described in Note 6 to the condensed consolidated financial statements, and $150,000 of payments under the convertible note receivable.

***Cash flows from financing activities***

We have financed our operations primarily through the sale of preferred stock, common stock, convertible notes, and promissory notes.

Net cash provided by financing activities was $2,539,392 and $176,627 for the three months ended March 31, 2025 and 2024, respectively.

Net cash provided by financing in activities during the three months ended March 31, 2025 is comprised primarily of (i) $2,394,708 of proceeds from the issuance of the Indigo Capital Convertible Notes, as further described in Note 8 to the condensed consolidated financial statements, (ii) $1.0 million in proceeds from the Liqueous Settlement Agreement, as further described in Note 6 to the condensed consolidated financial statements and (iii) a payment on debt borrowings of $835,316 related to the extinguishment of the remaining August 2024 Convertible Notes.

Net cash provided by financing activities in the first quarter of 2024 is comprised of proceeds from the issuance of Common Stock, offset by payments of accrued debt issuance costs for the Junior Notes.

**Key Operating and Financial Metrics (Non-GAAP Results)**

We regularly review several metrics, including the metrics presented in the table below, to measure our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of the key metrics and other measures discussed below may differ from other similarly-titled metrics used by other companies.

The following table presents our key performance indicators for the periods presented:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |  |
|  | **2025** | **2024** | **$ Change** |
|  | **(As Restated)** |  |  |
| Revenue | $— | $93549 | $(93549) |
| Total gross margin | 235717 | (763407) | 999124 |
| EBITDA<sup>(1)</sup> | (15978881) | (4268081) | (11710800) |
| Capital expenditures | (600000) |  | (600000) |
| Free cash flow<sup>(1)</sup> | (2527792) | (2093442) | (434350) |

---

(1) EBITDA and Free cash flow are non-GAAP financial measures. See "Non-GAAP Information" below for our definitions of, and additional information about, EBITDA and Free cash flow and for a reconciliation to the most directly comparable U.S. GAAP financial measures.

**Non-GAAP Information**

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively and in context, may be helpful to investors in assessing our operating performance and trends and in comparing our financial measures with those of comparable companies that may present similar non-GAAP financial measures.

------

[**<u>**Table of Contents**</u>**](#toc_page)

***EBITDA and Free Cash Flow***

We define "EBITDA" as income (loss), plus (minus) depreciation and amortization expenses, plus (minus) interest, plus (minus) taxes and define "Free cash flow" as net cash from (used in) operating activities less capital expenditures. EBITDA and Free cash flow are intended as supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP and these measures should not be considered a substitute for net income (loss), and net cash used in operating activities reported in accordance with GAAP. Our computation of EBITDA and Free cash flow may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA or Free cash flow in the same fashion.

***Limitations of Non-GAAP Measures***

There are a number of limitations related to EBITDA and free cash flow, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•EBITDA excludes certain recurring, non-cash charges, such as depreciation of property and equipment and amortization of intangible assets. While these are non-cash charges, we may need to replace the assets being depreciated and amortized in the future and EBITDA does not reflect cash requirements for these replacements or new capital expenditure requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•EBITDA does not reflect interest expense, net, which may constitute a significant recurring expense in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Free cash flow does not reflect the impact of equity or debt raises or repayment of debt or dividends paid.

Because of these and other limitations, EBITDA and Free cash flow should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Free cash flow on a supplemental basis. You should review the reconciliation of our net loss to EBITDA and net loss to Free cash flow below and not rely on any single financial measure to evaluate our business.

Our presentation of EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items and our presentation of Free cash flow does not necessarily indicate whether cash flows will be sufficient to fund our cash needs.

***Reconciliation***

The following table reconciles our net loss (the most directly comparable GAAP measure) to EBITDA for the periods presented:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
|  | **2025** | **2024** |
|  | **(As Restated)** |  |
| Net loss | $(16611425) | $(5705098) |
| Interest expense, net | 186095 | 1180122 |
| Depreciation and amortization | 446449 | 256895 |
| EBITDA | $(15978881) | $(4268081) |

---

The following table reconciles our net cash used in operating activities (the most directly comparable GAAP measure to Free cash flow) to Free cash flow for the periods presented:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(1927792) | $(2093442) |
| Capital expenditures | (600000) |  |
| Free cash flow | $(2527792) | $(2093442) |

---

**Off-Balance Sheet Arrangements**

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

**Contractual Obligations** 

For our contractual obligations that are expected to have an effect on our liquidity and cash flow, see section "Notes to Condensed Consolidated Financial Statements – Note 6 – Commitments and Contingencies" in the condensed consolidated financial statements.

**Critical Accounting Estimates**

Our condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses. We evaluate our estimates and assumptions on an ongoing basis. Our estimates and assumptions are based on historical experience and on various other factors that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

There have been no significant changes to our accounting policies during the three months ended March 31, 2025, as compared to the critical accounting policies described in our audited financial statements included in the Annual Report (as defined above).

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Recently Issued and Adopted Accounting Pronouncements**

We review new accounting standards to determine the expected financial impact, if any, that the adoption of each new standard will have. For the recently issued and adopted accounting standards that we believe may have an impact on our condensed consolidated financial statements, see the section entitled "Notes to Condensed Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies" in the condensed consolidated financial statements.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

**Item 4. Controls and Procedures** 

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Executive Chairman, as appropriate, to allow timely decisions regarding required disclosure.

*Evaluation of Disclosure Controls and Procedures*

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our management concluded that our internal control over financial reporting was not effective due to a material weakness in our control environment around the accounting and presentation of complex financial instrument transactions that was not effectively designed or maintained. This material weakness resulted in the restatement of the Company's financial statements as of and for the three months ended March 31, 2025 covered by this Amendment No.1 on Form 10-Q/A. Additionally, this material weakness could result in material misstatements of the financial statements that would not be prevented or detected on a timely basis. See Note 15, "*Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements*" in Item 1 of this Amendment No. 1 on Form 10-Q/A for additional information.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we intend to implement the following changes during our fiscal year ending December 31, 2025: (i) hire additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are dependent upon our receiving additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

*Changes in Internal Control over Financial Reporting*

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(f) or 15d-15(f) of the Exchange Act during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II - OTHER IN** **FORMATION**

**Item 1. Legal Proceedings.**

The information under the caption "Commitments and Contingencies" in Note 6 of the unaudited condensed consolidated financial statements of this Quarterly Report is incorporated herein by reference.

In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for legal proceedings when it is probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. At March 31, 2025, the Company was subject to legal proceedings as described in further detail below.

During the first quarter, the Company was subject to three separate actions seeking default judgments for the alleged failure to pay amounts when due. CFGI, LLC is seeking a total judgment in the amount of $86,826 through the Superior Court of the Commonwealth of Massachusetts, FICTIV, Inc. obtained a default judgment through the Superior Court of California on January 30, 2025 in the amount $197,899, which was subsequently settled by the Company, and the Landlord sought a total judgment in the amount of $409,278 through the Arapahoe County Colorado District Court, which it obtained in April. See additional detail regarding the Landlord default judgment in Inventory, Property and Equipment and Right-of-Use Asset Impairment in Note 1.

**Item 1A. Risk Factors.**

------

[**<u>**Table of Contents**</u>**](#toc_page)

In addition to the other information contained in this Quarterly Report on Form 10-Q, you should consider the following risk factor, which supplements those contained in in Part I, Item 1A. "Risk Factors" of our most recently filed Form 10-K, as amended, in evaluating our results of operations, financial condition, business and operations or an investment in the shares of our Company. There have been no material changes from the risk factors disclosed in our Form 10-K, as amended. If any of the risks discussed in our Form 10-K, as amended, are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected.

**Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.**

Descriptions of the financing transactions described above under "R*ecent Developments and Financing Transactions*" in Part I, Item 2 in this Quarterly Report on Form 10-Q, as well as share-based compensation arrangements described in Note 11, *Stock-Based Compensation*, to the condensed consolidated financial statements are incorporated herein by reference. Such transactions were conducted as private placements to accredited investors exempt from registration under Section 4(a)(2) of the Securities Act.

**Item 3. Defaults Upon Senior Securities.**

See Note 8, *Notes and Convertible Notes Payable.* 

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Inf** **ormation.**

Not applicable.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**Item 6. Exhi** **bits**

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **No.** | **Description of Exhibit** | **Form** | **File No.** | **Exhibit No.** | **Filing Date** |
| 2.1† | [<u>Business Combination Agreement, dated as of August 5, 2022, by and among Tailwind Acquisition Corp., Compass Merger Sub, Inc. and Nuburu, Inc.</u>](https://www.sec.gov/Archives/edgar/data/1814215/000110465922086905/tm2222600d1_ex2-1.htm) | 8-K | 001-39489 | 2.1 | August 8, 2022 |
| 3.1 | [<u>Amended and Restated Bylaws of the Company.</u>](https://www.sec.gov/Archives/edgar/data/1814215/000110465920103491/tm2022659d16_ex3-2.htm) | 8-K | 001-39489 | 3.2 | September 9, 2020 |
| 3.2 | [<u>Amendment to the Amended and Restated Bylaws of the Company</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017024125055/buru-ex3_1.htm) | 8-K | 001-39489 | 3.1 | November 12, 2024 |
| 3.3 | [<u>Amended and Restated Certificate of Incorporation of the Company.</u>](https://www.sec.gov/Archives/edgar/data/1814215/000119312523025555/d399353dex31.htm) | 8-K | 001-39489 | 3.1 | February 6, 2023 |
| 3.4 | [<u>Amendment to the Amended and Restated Certificate of Incorporation of the Company</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017024072701/buru-ex3_1.htm) | 8-K | 001-39489 | 3.1 | June 13, 2024 |
| 3.5 | [<u>Certificate of Designations of the Company.</u>](https://www.sec.gov/Archives/edgar/data/1814215/000119312523025555/d399353dex33.htm) | 8-K | 001-39489 | 3.3 | February 6, 2023 |
| 10.1 | [<u>Proposal Letter dated January 13, 2025,among S.F.E. Equity Investments SARL, The AvantGarde Group S.p.A., Alessandro Zamboni and the Company</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_1.htm) | 10-Q | 001-39489<br>| 10.1<br>| May 20, 2025 |
| 10.2 | [<u>Comprehensive Settlement Agreement, Mutual Release of Liability and Indemnification dated January 14, 2025, between the Company and Liqueous LP</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_2.htm) | 10-Q<br>| 001-39489<br>| 10.2 | May 20, 2025<br>|
| 10.3 | [<u>Amendment to Comprehensive Settlement Agreement, Mutual Release of Liability and Indemnification dated February 14, 2025 between the Company and Liqueous, LP</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_3.htm) | 10-Q | 001-39489<br>| 10.3 | May 20, 2025<br>|
| 10.4 | [<u>Second Amendment to Comprehensive Settlement Agreement, Mutual Release of Liability and Indemnification, dated February 17, 2025, between the Company and Liqueous LP</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_4.htm) | 10-Q | 001-39489<br>| 10.4 | May 20, 2025<br>|
| 10.5 | [<u>Binding and Irrevocable Commitment Letter, dated February 14, 2025, among the Company, Trumar Capital LLC and Ambrogio D'Arrezzo</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_5.htm) | 10-Q | 001-39489<br>| 10.5<br>| May 20, 2025<br>|
| 10.6 | [<u>Subordinated Convertible Note, dated March 3, 2025, between the Company and Indigo Capital LP</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_6.htm) | 10-Q | 001-39489<br>| 10.6 | May 20, 2025<br>|
| 10.7 | [<u>Subordinated Convertible Exchange Note, dated March 3, 2025, between the Company and Indigo Capital LP</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_7.htm) | 10-Q | 001-39489<br>| 10.7 | May 20, 2025<br>|
| 10.8 | [<u>On Demand Facility Agreement, dated March 18, 2025, between the Company and Supply@ME Capital plc</u>](https://www.sec.gov/Archives/edgar/data/1814215/000095017025075392/buru-ex10_8.htm) | 10-Q | 001-39489<br>| 10.8 | May 20, 2025<br>|
| 31.1\* | [<u>Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](buru-ex31_1.htm) |  |  |  |  |
| 31.2\* | [<u>Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](buru-ex31_2.htm) |  |  |  |  |
| 32.1\*\* | [<u>Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](buru-ex32_1.htm) |  |  |  |  |
| 32.2\*\* | [<u>Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](buru-ex32_2.htm) |  |  |  |  |
| 101.INS | Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. |  |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |  |  |  |  |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |  |  |  |  |

---

\* Filed herewith

\*\* Furnished herewith.

† Certain of the exhibits and schedules to these exhibits have been omitted in accordance with Regulation S-K Item 601(a)(5). The registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

------

[**<u>**Table of Contents**</u>**](#toc_page)

**SIGNA** **TURES**

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| July 3, 2025 | NUBURU, INC. | NUBURU, INC. |
| By: | /s/ Alessandro Zamboni | /s/ Alessandro Zamboni |
|  | Name: | Alessandro Zamboni |
|  | Title: | Executive Chairman |
|  |  | (Principal Executive Officer and Principal Financial and Accounting Officer) |

---

------

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Alessandro Zamboni, certify that:

1. I have reviewed this Amendment No. 1 to the quarterly report on Form 10-Q of Nuburu, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: July 3, 2025 | By: | /s/ Alessandro Zamboni |
|  |  | **Alessandro Zamboni** |
|  |  | **Executive Chairman**<br>**(Principal Executive Officer)** |

---

------

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Alessandro Zamboni, certify that:

1. I have reviewed this Amendment No. 1 to the quarterly report on Form 10-Q of Nuburu, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: July 3, 2025 | By: | /s/ Alessandro Zamboni |
|  |  | **Alessandro Zamboni** |
|  |  | **Executive Chairman**<br>**(Principal Financial and Accounting Officer)** |

---

------

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Amendment No.1 to the Quarterly Report of Nuburu, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: July 3, 2025 | By: | /s/ Alessandro Zamboni |
|  |  | **Alessandro Zamboni** |
|  |  | **Executive Chairman**<br>**(Principal Executive Officer)** |

---

------

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Amendment No.1 to the Quarterly Report of Nuburu, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: July 3, 2025 | By: | /s/ Alessandro Zamboni |
|  |  | **Alessandro Zamboni** |
|  |  | **Executive Chairman**<br>**(Principal Financial and Accounting Officer)** |

---

------