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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2024

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 incorporation or organization) | (I.R.S. Employer Identification No.)
7442 S Tucson Way, Suite 130, 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 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 November 8, 2024, the registrant had 18,686,931 shares of common stock, $0.0001 par value per share, outstanding.

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NUBURU, INC.

FORM 10-Q

|  | Page
PART 1 – INTERIM FINANCIAL INFORMATION |
| Cautionary Note Regarding Forward-looking Statements | 3
Item 1. | Unaudited Condensed Consolidated Financial Statements | 5
| Condensed Consolidated Balance Sheets (As Restated) | 5
| ​ |
| Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | 6
| ​ |
| Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit (Unaudited) (As Restated) | 7
| ​ |
| Condensed Consolidated Statements of Cash Flows (Unaudited) | 9
| ​ |
| Notes to Condensed Consolidated Financial Statements (As Restated) | 10
| ​ |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30
| ​ |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 41
| ​ |
Item 4. | Controls and Procedures | 41
| ​ |
PART II – OTHER INFORMATION | 42
| ​ |
Item 1. | Legal Proceedings | 42
| ​ |
Item 1A. | Risk Factors | 42
| ​ |
Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 42
| ​ |
Item 3. | Defaults Upon Senior Securities | 43
| ​ |
Item 4. | Mine Safety Disclosures | 43
| ​ |
Item 5. | Other Information | 43
| ​ |
Item 6. | Exhibits | 44
| ​ |
SIGNATURES |  | 45

​

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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:

•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
•
our public securities’ potential liquidity and trading;
•
the ability to maintain the listing of our common stock, par value $0.0001 par value per share (the “Common Stock”) on a securities exchange;
•
the anticipated benefits of the Business Combination (as defined in "Frequently Used Terms" below);
•
the outcome of any legal proceedings that may be instituted against us;
•
existing regulations and regulatory developments in the United States and other jurisdictions;
•
the need to hire additional personnel and our ability to attract and retain such personnel;
•
our plans and ability to obtain, maintain, enforce, or protect intellectual property rights;
•
our ability to obtain additional financing, including through public or private offerings of our securities or under any equity line of credit we may have in place from time-to-time;
•
our business, operations and financial performance, including:
•
expectations with respect to financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;
•
future business plans and growth opportunities, including revenue opportunity available from new or existing clients and expectations regarding the use of blue laser technology in 3D printing applications;
•
expectations regarding product development and pipeline;
•
expectations regarding research and development efforts;
•
expectations regarding market size;
•
expectations regarding the competitive landscape;
•
expectations regarding future acquisitions, partnerships or other relationships with third parties; and
•
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, 2023 (our “Annual Report”), as amended, as well as the following important factors:

•
our inability to obtain financing;
•
our ability to meet NYSE American’s continued listing standards;
•
our inability to protect our intellectual property;
•
whether the market embraces our products;
•
whether we achieve full commercialization in a timely manner;
•
the outcome of any legal proceedings that may be instituted against us;
•
the inability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, our ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain our management and key employees;
•
our ability to retain or recruit key employees;

3

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•
costs related to being a public company;
•
changes in applicable laws or regulations;
•
the possibility that we may be adversely affected by economic, business or competitive factors;
•
volatility in the financial sector and markets caused by geopolitical and economic factors; and
•
other risks and uncertainties set forth under the heading “Risk Factors” in Part II, Item 1A and elsewhere in this Quarterly Report and our Annual 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.

Frequently Used Terms

Unless otherwise stated in Item 1. Unaudited Condensed Consolidated Financial Statements and accompanying footnotes, or the context otherwise requires, references in this Quarterly Report to:

“Business Combination” are to the business combination of Legacy Nuburu (defined below) with a subsidiary of Tailwind (defined below), with Legacy Nuburu surviving such business combination as a wholly owned subsidiary of Tailwind;

“Business Combination Agreement” are to that certain Business Combination Agreement, dated as of August 5, 2022, by and among Tailwind, Nuburu, Inc. and Compass Merger Sub, Inc., as the same has been or may be amended, modified, supplemented or waived from time to time;

“Closing” are to the consummation of the Transactions (defined below);

“Closing Date” are to January 31, 2023, the date on which the Transactions were consummated;

"Common Stock" are to the Company's common stock, par value of $0.0001 per share, listed on the New York Stock Exchange after the Business Combination;

“Exchange Ratios” are to the quotients as defined in, and calculated in accordance with, the Business Combination Agreement, which was included as an exhibit to our Current Report on Form 8-K (File No. 001-39489) filed with the SEC on February 6, 2023;

“Legacy Nuburu” are to Nuburu Subsidiary, Inc., a Delaware corporation (f/k/a Nuburu, Inc. before the Closing Date);

“Public Warrants” are to the 16,710,785 whole warrants of the Company sold to public investors in the Tailwind IPO (defined below);

“SEC” are to the Securities and Exchange Commission;

“Tailwind” are to Tailwind Acquisition Corp, a Delaware corporation and our predecessor company prior to the consummation of the Transactions, which changed its name to Nuburu, Inc. following the consummation of the Transactions, and its consolidated subsidiaries;

“Tailwind IPO” are to the initial public offering by Tailwind which closed on September 9, 2020; and

“Transactions” are to the Business Combination, together with the other transactions contemplated by the Business Combination Agreement and the related agreements.

Unless the context otherwise requires, all references in this section to “Nuburu,” the “Company,” “we,” “us,” “our,” and other similar terms refer to: (i) Legacy Nuburu and its subsidiaries prior to the Closing, and (ii) Nuburu, Inc., a Delaware corporation, and its consolidated subsidiary, Nuburu Subsidiary, Inc., after the Closing.

4

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PART 1 – FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidate d Financial Statements

NUBURU, INC.

CONDENSED CONSOLIDA TED BALANCE SHEETS

|  | September 30, 2024 |  |  | December 31, 2023 |
|  | (Unaudited) |  |  | (As Restated) |
ASSETS |  |  |  |  |  |
Current assets |  | ​ |  |  |  |
Cash and cash equivalents |  | $ | 232,075 |  |  | $ | 2,148,700 |
Accounts receivable |  |  | 54,600 |  |  |  | 482,279 |
Inventories, net of reserve of $1,161,469 and $1,133,457 at September 30, 2024 and December 31, 2023, respectively |  |  | 1,526,470 |  |  |  | 1,456,275 |
Deferred financing costs |  |  | — |  |  |  | 50,000 |
Prepaid expenses and other current assets |  |  | 527,061 |  |  |  | 156,255 |
Total current assets |  |  | 2,340,206 |  |  |  | 4,293,509 |
Property and equipment, net |  |  | 5,137,035 |  |  |  | 5,650,976 |
Operating lease right-of-use assets |  |  | 300,688 |  |  |  | 586,164 |
Other assets |  |  | 34,359 |  |  |  | 34,359 |
TOTAL ASSETS |  | $ | 7,812,288 |  |  | $ | 10,565,008 |
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable |  | $ | 5,962,062 |  |  | $ | 4,744,606 |
Accrued expenses |  |  | 4,443,179 |  |  |  | 2,750,305 |
Current portion of operating lease liability |  |  | 328,554 |  |  |  | 355,385 |
Contract liabilities |  |  | 24,000 |  |  |  | 30,400 |
Shareholder advances |  |  | 644,936 |  |  |  | — |
Current portion of notes payable |  |  | 4,232,041 |  |  |  | 2,147,992 |
Convertible note derivative liability |  |  | 37,900 |  |  |  | — |
Total current liabilities |  |  | 15,672,672 |  |  |  | 10,028,688 |
Operating lease liability, net of current portion |  |  | — |  |  |  | 237,369 |
Convertible notes payable |  |  | 4,511,880 |  |  |  | 6,713,241 |
Warrant liabilities |  |  | 82,333 |  |  |  | 2,238,519 |
TOTAL LIABILITIES |  |  | 20,266,885 |  |  |  | 19,217,817 |
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 September 30, 2024 and December 31, 2023 |  |  | 23,889,050 |  |  |  | 23,889,050 |
Stockholders’ Deficit |  |  |  |  |  |
Common stock, $0.0001 par value; 250,000,000 shares authorized; 5,686,498 and 922,362 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (1) |  |  | 569 |  |  |  | 92 |
Additional paid-in capital (1) |  |  | 83,708,136 |  |  |  | 64,744,838 |
Accumulated deficit |  |  | (120,052,352 | ) |  |  | (97,286,789 | )
Total Stockholders’ Deficit |  |  | (36,343,647 | ) |  |  | (32,541,859 | )
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |  | $ | 7,812,288 |  |  | $ | 10,565,008 |

(1)
Amount presented as of December 31, 2023 is 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.

5

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NUBURU, INC.

CONDENSED CONSOLIDATE D STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

​ | ​ | Three Months Ended September 30, |  | ​ | Nine Months Ended September 30, |
​ |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Revenue | ​ | $ | — |  |  | $ | 186,743 |  |  | $ | 142,827 |  |  | $ | 1,710,794 |
Cost of revenue |  |  | 359,950 |  |  |  | 1,115,703 |  |  |  | 1,950,632 |  |  |  | 4,813,404 |
Gross margin | ​ |  | (359,950 | ) |  |  | (928,960 | ) | ​ |  | (1,807,805 | ) |  |  | (3,102,610 | )
Operating expenses: | ​ |  |  |  |  |  | ​ |  |  |  |  |
Research and development | ​ |  | 206,474 |  |  |  | 1,348,450 |  |  |  | 1,656,350 |  |  |  | 4,300,166 |
Selling and marketing |  |  | 113,445 |  |  |  | 523,627 |  |  |  | 385,965 |  |  |  | 1,066,289 |
General and administrative | ​ |  | 1,941,085 |  |  |  | 2,335,605 |  |  |  | 6,941,448 |  |  |  | 8,409,877 |
Total operating expenses | ​ |  | 2,261,004 |  |  |  | 4,207,682 |  | ​ |  | 8,983,763 |  |  |  | 13,776,332 |
Loss from operations |  |  | (2,620,954 | ) |  |  | (5,136,642 | ) |  |  | (10,791,568 | ) |  |  | (16,878,942 | )
Interest income |  |  | 721 |  |  |  | 46,998 |  |  |  | 17,202 |  |  |  | 91,914 |
Interest expense |  |  | (929,046 | ) |  |  | (162,765 | ) |  |  | (2,821,527 | ) |  |  | (175,149 | )
Change in fair value of warrant liabilities |  |  | 369,674 |  |  |  | 167,108 |  |  |  | 2,156,186 |  |  |  | 1,002,647 |
Change in fair value of derivative liability |  |  | 141,100 |  |  |  | — |  |  |  | 141,100 |  |  |  | — |
Loss on extinguishment of debt |  |  | (1,339,017 | ) |  |  | — |  |  |  | (11,685,125 | ) |  |  | — |
Other income, net | ​ |  | — |  |  |  | — |  |  |  | 218,169 |  |  |  | — |
Loss before provision for income taxes |  | $ | (4,377,522 | ) |  | $ | (5,085,301 | ) |  | $ | (22,765,563 | ) |  | $ | (15,959,530 | )
Provision for income taxes |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net loss and comprehensive loss | ​ | $ | (4,377,522 | ) |  | $ | (5,085,301 | ) | ​ | $ | (22,765,563 | ) |  | $ | (15,959,530 | )
Net loss per common share, basic and diluted (1) | ​ | $ | (1.12 | ) |  | $ | (5.74 | ) | ​ | $ | (10.45 | ) |  | $ | (19.98 | )
Weighted-average common shares used to compute net loss per common share, basic and diluted (1) | ​ |  | 3,924,580 |  |  |  | 885,628 |  |  |  | 2,178,902 |  |  |  | 798,888 |

(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.

6

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NUBURU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

(UNAUDITED)

​ | ​ | Convertible Preferred Stock |  |  | ​ | Common Stock |  | ​ | ​ |  |  |  |  |  |  |
​ |  | Shares |  |  | Amount |  |  |  | Shares (1) |  |  | Amount (1) |  |  | Additional Paid-in Capital (1) |  |  | Accumulated Deficit |  |  | Total Stockholders' Deficit |
Balance as of December 31, 2023 |  |  | 2,388,905 |  | ​ | $ | 23,889,050 |  |  |  |  | 922,362 |  | ​ | $ | 92 |  | ​ | $ | 64,744,838 |  | ​ | $ | (97,286,789 | ) | ​ | $ | (32,541,859 | )
Issuance of Common Stock |  |  | — |  |  |  | — |  |  |  |  | 40,000 |  |  |  | 4 |  |  |  | 199,996 |  |  |  | — |  |  |  | 200,000 |
Issuance of Common Stock from releases of restricted stock units |  |  | — |  |  |  | — |  |  |  |  | 1,237 |  |  |  | 1 |  |  |  | (1 | ) |  |  | — |  |  |  | — |
Restricted stock units used for tax withholdings |  |  | — |  |  |  | — |  |  |  |  | (285 | ) |  |  | (1 | ) |  |  | (1,872 | ) |  |  | — |  |  |  | (1,873 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  |  | - |  |  |  | - |  |  |  | 614,115 |  |  |  | — |  |  |  | 614,115 |
Net loss | ​ |  | — |  | ​ |  | — |  |  | ​ |  | - |  | ​ |  | - |  | ​ |  | - |  | ​ |  | (5,700,653 | ) | ​ |  | (5,700,653 | )
Balance as of March 31, 2024 | ​ |  | 2,388,905 |  | ​ | $ | 23,889,050 |  |  | ​ |  | 963,314 |  | ​ | $ | 96 |  | ​ |  | 65,557,076 |  | ​ | $ | (102,987,442 | ) | ​ | $ | (37,430,270 | )
Issuance of Common Stock to extinguish debt |  |  | — |  |  |  | — |  |  |  |  | 2,248,312 |  |  |  | 225 |  |  |  | 13,356,187 |  |  |  | — |  |  |  | 13,356,412 |
Issuance of Common Stock from releases of restricted stock units |  |  | — |  |  |  | — |  |  |  |  | 48,779 |  |  |  | 5 |  |  |  | (5 | ) |  |  | — |  |  |  | — |
Restricted stock units used for tax withholdings |  |  | — |  |  |  | — |  |  |  |  | (13,082 | ) |  |  | (1 | ) |  |  | (70,712 | ) |  |  | — |  |  |  | (70,713 | )
Issuance of pre-funded warrants |  |  | — |  |  |  | — |  |  |  |  | - |  |  |  | - |  |  |  | 1,539,866 |  |  |  | — |  |  |  | 1,539,866 |
Stock-based compensation |  |  | — |  |  |  | — |  |  |  |  | - |  |  |  | - |  |  |  | 450,572 |  |  |  | — |  |  |  | 450,572 |
Net loss | ​ |  | — |  |  |  | — |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (12,687,388 | ) |  |  | (12,687,388 | )
Balance as of June 30, 2024 | ​ |  | 2,388,905 |  | ​ | $ | 23,889,050 |  |  | ​ |  | 3,247,323 |  | ​ | $ | 325 |  | ​ |  | 80,832,984 |  | ​ | $ | (115,674,830 | ) | ​ | $ | (34,841,521 | )
Fractional shares issued for stock split |  |  | — |  |  |  | — |  |  |  |  | 25,635 |  |  |  | 3 |  |  |  | (3 | ) |  |  | — |  |  |  | - |
Common stock issued for services |  |  | — |  |  |  | — |  |  |  |  | 12,500 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 1 |
Issuance of Common Stock to extinguish debt |  |  | — |  |  |  | — |  |  |  |  | 2,399,850 |  |  |  | 240 |  |  |  | 1,828,052 |  |  |  | — |  |  |  | 1,828,292 |
Issuance of Common Stock from releases of restricted stock units |  |  | — |  |  |  | — |  |  |  |  | 1,491 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |
Restricted stock units used for tax withholdings |  |  | — |  |  |  | — |  |  |  |  | (301 | ) |  |  | — |  |  |  | (502 | ) |  |  | — |  |  |  | (502 | )
Issuance of pre-funded warrants |  |  | — |  |  |  | — |  |  |  |  | - |  |  |  | — |  |  |  | 600,000 |  |  |  | — |  |  |  | 600,000 |
Stock-based compensation |  |  | — |  |  |  | — |  |  |  |  | - |  |  |  | — |  |  |  | 447,605 |  |  |  | — |  |  |  | 447,605 |
Net loss | ​ |  | — |  | ​ |  | — |  |  | ​ |  | - |  | ​ |  | — |  | ​ |  | — |  | ​ |  | (4,377,522 | ) | ​ |  | (4,377,522 | )
Balance as of September 30, 2024 | ​ |  | 2,388,905 |  | ​ | $ | 23,889,050 |  |  | ​ |  | 5,686,498 |  | ​ | $ | 569 |  | ​ | $ | 83,708,136 |  | ​ | $ | (120,052,352 | ) | ​ | $ | (36,343,647 | )

(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.

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NUBURU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

(UNAUDITED) - (Continued)

​ | ​ | Convertible Preferred Stock |  |  | ​ | Common Stock |  | ​ |  |  |  |  |  |  |  |
​ |  | Shares(2) |  |  | Amount |  |  |  | Shares(1) (2) |  |  | Amount |  |  | Additional Paid-in Capital |  |  | Accumulated Deficit |  |  | Total Stockholders' Equity (Deficit) |
Balance as of December 31, 2022 |  |  | 23,237,703 |  | ​ | $ | 4,040 |  |  | ​ |  | 138,922 |  | ​ | $ | 13 |  | ​ | $ | 59,346,016 |  | ​ | $ | (76,580,405 | ) | ​ | $ | (17,234,376 | )
Issuance of Common Stock and Series A preferred stock upon conversion of convertible notes in connection with the reverse recapitalization |  |  | 1,361,787 |  |  |  | 13,617,870 |  |  |  |  | 34,045 |  |  |  | 3 |  |  |  | 13,345,377 |  |  |  | — |  |  |  | 13,345,380 |
Conversion of Legacy Nuburu convertible preferred stock into Common Stock in connection with the reverse recapitalization |  |  | (23,237,703 | ) |  |  | (4,040 | ) |  |  |  | 580,943 |  |  |  | 59 |  |  |  | 1,717 |  |  |  | — |  |  |  | 1,776 |
Issuance of Common Stock and Series A preferred stock upon the reverse recapitalization, net of issuance costs |  |  | 1,481,666 |  |  |  | 14,816,660 |  |  |  |  | 80,844 |  |  |  | 9 |  |  |  | (18,071,777 | ) |  |  | — |  |  |  | (18,071,768 | )
Issuance of Common Stock and Series A preferred stock to satisfy certain reverse recapitalization costs |  |  | 195,452 |  |  |  | 1,954,520 |  |  |  |  | 4,887 |  |  |  | — |  |  |  | (1,954,540 | ) |  |  | — |  |  |  | (1,954,540 | )
Recognition of Public Warrants upon the reverse recapitalization |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | (1,336,863 | ) |  |  | — |  |  |  | (1,336,863 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 463,978 |  |  |  | — |  |  |  | 463,978 |
Net loss |  |  | — |  | ​ |  | — |  |  | ​ |  | — |  | ​ |  | — |  | ​ |  | — |  | ​ |  | (4,767,517 | ) | ​ |  | (4,767,517 | )
Balance as of March 31, 2023 | ​ |  | 3,038,905 |  | ​ | $ | 30,389,050 |  |  | ​ |  | 839,641 |  | ​ | $ | 84 |  | ​ | $ | 51,793,908 |  | ​ | $ | (81,347,922 | ) | ​ | $ | (29,553,930 | )
Issuance of Common Stock from option exercises |  |  | — |  |  |  | — |  |  |  |  | 129 |  |  |  | — |  |  |  | 6,999 |  |  |  | — |  |  |  | 6,999 |
Issuance of Common Stock from releases of restricted stock units |  |  | — |  |  |  | — |  |  |  |  | 391 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Issuance of Common Stock from the Lincoln Park Purchase Agreement |  |  | — |  |  |  | — |  |  |  |  | 42,048 |  |  |  | 4 |  |  |  | 2,099,993 |  |  |  | — |  |  |  | 2,099,997 |
Issuance of Common Stock warrants in connection with the 2023 Note and Warrant Purchase Agreement (net of issuance cost of $160,345) |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 2,351,414 |  |  |  | — |  |  |  | 2,351,414 |
Stock-based compensation |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 796,783 |  |  |  | — |  |  |  | 796,783 |
Net loss |  |  | — |  | ​ |  | — |  |  | ​ |  | — |  | ​ |  | — |  | ​ |  | — |  | ​ |  | (6,106,712 | ) | ​ |  | (6,106,712 | )
Balance as of June 30, 2023 | ​ |  | 3,038,905 |  | ​ | $ | 30,389,050 |  |  | ​ |  | 882,209 |  | ​ | $ | 88 |  | ​ | $ | 57,049,097 |  | ​ | $ | (87,454,634 | ) | ​ | $ | (30,405,449 | )
Issuance of Common Stock from releases of restricted stock units |  |  | — |  |  |  | — |  |  |  |  | 8,165 |  |  |  | 1 |  |  |  | (1 | ) |  |  | — |  |  |  | — |
Restricted stock units used for tax withholdings |  |  | — |  |  |  | — |  |  |  |  | (1,505 | ) |  |  | (1 | ) |  |  | (31,594 | ) |  |  | — |  |  |  | (31,595 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 635,028 |  |  |  | — |  |  |  | 635,028 |
Net loss |  |  | — |  | ​ |  | — |  |  | ​ |  | — |  | ​ |  | — |  | ​ |  | — |  | ​ |  | (5,085,301 | ) | ​ |  | (5,085,301 | )
Balance as of September 30, 2023 | ​ |  | 3,038,905 |  | ​ | $ | 30,389,050 |  |  | ​ |  | 888,869 |  | ​ | $ | 88 |  | ​ | $ | 57,652,530 |  | ​ | $ | (92,539,935 | ) | ​ | $ | (34,887,317 | )

(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.
(2)
The number of shares of convertible preferred stock and common stock issued and outstanding prior to the Business Combination have been retroactively adjusted by the Exchange Ratio to give effect to the reverse recapitalization treatment of the Business Combination. See Note 1 - Description of Business and Note 3 - Reverse Capitalization for more information.

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

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N UBURU, INC.

CONDENSED CONSOLIDATE D STATEMENTS OF CASH FLOWS

(UNAUDITED)

​ | ​ | Nine Months Ended September 30, |
​ |  | 2024 |  |  | 2023 |
Cash Flows from Operating Activities: |  | ​ |  | ​ | ​ |
Net loss | ​ | $ | (22,765,563 | ) | ​ | $ | (15,959,530 | )
Adjustments to reconcile net loss to net cash used in operating activities: | ​ | ​ |  | ​ | ​ |
Depreciation and amortization | ​ |  | 596,256 |  | ​ |  | 369,971 |
Stock-based compensation | ​ |  | 1,512,292 |  | ​ |  | 1,895,789 |
Change in fair value of warrant liabilities |  |  | (2,156,186 | ) |  |  | (1,002,647 | )
Change in fair value of derivative liability |  |  | (141,100 | ) |  |  | — |
Inventory reserve adjustments |  |  | 28,012 |  |  |  | 754,840 |
Amortization of debt discount |  |  | 2,218,506 |  |  |  | — |
Amortization of deferred financing costs |  |  | 551,431 |  |  |  | — |
Loss on extinguishment of debt |  |  | 11,685,125 |  |  |  | — |
Changes in operating assets and liabilities: | ​ |  |  | ​ |  |
Accounts receivable | ​ |  | 427,679 |  | ​ |  | (142,704 | )
Inventories | ​ |  | (203,497 | ) | ​ |  | (957,916 | )
Prepaid expenses and other current assets |  |  | (370,806 | ) |  |  | (492,507 | )
Operating lease right-of-use asset |  |  | 285,476 |  |  |  | 231,463 |
Accounts payable | ​ |  | 1,138,413 |  | ​ |  | 2,695,273 |
Accrued expenses |  |  | 1,964,723 |  |  |  | (447,024 | )
Contract liabilities |  |  | (6,400 | ) |  |  | 51,325 |
Operating lease liability | ​ |  | (264,200 | ) | ​ |  | (255,514 | )
Net cash used in operating activities | ​ |  | (5,499,839 | ) | ​ |  | (13,259,181 | )
Cash Flows from Investing Activities: | ​ | ​ |  | ​ | ​ |
Purchase of property and equipment | ​ |  | — |  | ​ |  | (1,142,910 | )
Net cash used in investing activities | ​ |  | — |  | ​ |  | (1,142,910 | )
Cash Flows from Financing Activities: | ​ |  |  | ​ | ​ |
Proceeds from issuance of June 2023 Senior Convertible Notes and Warrants |  |  | — |  |  |  | 9,225,000 |
Proceeds from issuance of common stock |  |  | 200,000 |  |  |  | — |
Proceeds from issuance of pre-funded warrants |  |  | 2,139,866 |  |  |  | — |
Proceeds from the exercise of stock options |  |  | — |  |  |  | 6,999 |
Restricted stock units used for tax withholdings |  |  | (73,088 | ) |  |  | (31,595 | )
Proceeds from the issuance of Legacy Nuburu preferred stock |  |  | — |  |  |  | 5,000 |
Proceeds from reverse recapitalization |  |  | — |  |  |  | 3,243,079 |
Proceeds from debt borrowings |  |  | 743,000 |  |  |  | — |
Proceeds from issuance of Common Stock from the Lincoln Park Purchase Agreement |  |  | — |  |  |  | 2,099,997 |
Payment of transaction costs related to the reverse recapitalization |  |  | — |  |  |  | (4,734,913 | )
Proceeds from issuance of Legacy Nuburu convertible promissory notes | ​ |  | — |  | ​ |  | 4,100,000 |
Repayment of related party convertible promissory notes |  |  | — |  |  |  | (675,000 | )
Payment of offering costs related to the 2023 Note and Warrant Purchase Agreement |  |  | — |  |  |  | (25,000 | )
Shareholder advances |  |  | 644,936 |  |  |  | — |
Payment of deferred financing costs |  |  | (71,500 | ) |  |  | (65,000 | )
Net cash provided by financing activities | ​ |  | 3,583,214 |  | ​ |  | 13,148,567 |
NET CHANGE IN CASH DURING THE PERIOD | ​ |  | (1,916,625 | ) | ​ |  | (1,253,524 | )
CASH AND CASH EQUIVALENTS ―BEGINNING OF PERIOD | ​ |  | 2,148,700 |  | ​ |  | 2,880,254 |
CASH AND CASH EQUIVALENTS ―END OF PERIOD | ​ | $ | 232,075 |  | ​ | $ | 1,626,730 |
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: |  |  |  |  |  |
Transfer of property and equipment from inventory |  | $ | 154,971 |  |  | $ | — |
Purchase of property and equipment in accounts payable and accrued expenses |  | $ | 540,028 |  |  | $ | — |
Deferred financing costs included in accounts payable and accrued expenses |  | $ | 712,363 |  | ​ | $ | — |
Transaction costs related to the reverse recapitalization not yet paid |  | $ | 1,007,439 |  | ​ | $ | 1,007,439 |
Convertible promissory notes and warrants issuance costs included in accounts payable and accrued expenses |  | $ | — |  |  | $ | 160,345 |
Issuance of Common Stock upon extinguishment of debt |  | $ | 15,184,704 |  |  | $ | — |
Issuance of Common Stock upon conversion of preferred stock in connection with the reverse recapitalization |  | $ | — |  | ​ | $ | 11,575,286 |

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

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

NOTE 1. BACKGROUND AND ORGANIZATION

Nuburu, Inc. (“Nuburu” or the “Company”) and its wholly-owned subsidiary Nuburu Subsidiary, Inc., is a leading innovator in high-power, high-brightness blue laser technology that is focused on bringing breakthrough improvements to a broad range of high-value applications including welding and 3D printing.

Nuburu 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”), we consummated our initial public offering (the “IPO”). On January 31, 2023, we consummated a business combination with Nuburu Subsidiary, Inc. f/k/a Nuburu, Inc. (“Legacy Nuburu”), a privately held operating company which merged into our subsidiary Compass Merger Sub, Inc. (the “Business Combination”) and changed our name to “Nuburu, Inc.,” and we became the owner, directly or indirectly, of all of the equity interests of Nuburu Subsidiary, Inc. and its subsidiaries. In light of the fact that the Business Combination has closed and our ongoing business will be the business formerly operated by Legacy Nuburu, this business section primarily includes information regarding Legacy Nuburu’s business.

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 devotes its efforts to business planning, research and development, and raising capital. 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 September 30, 2024, the Company has incurred operating losses and negative cash flows from operating activities. For the nine months ended September 30, 2024 and 2023, the Company has incurred operating losses, including net losses of $22,765,563 and $15,959,530, respectively, and the Company has an accumulated deficit of $120,052,352 as of September 30, 2024. The Company anticipates that it will incur net losses for the foreseeable future and, even if it increases 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.

Until the Company can generate sufficient revenue to cover its operating expenses, working capital, and capital expenditures, it will rely on private and public capital raising efforts.

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.

Significant Risks and Uncertainties

The Company’s current business activities consist of business planning, research and development efforts to design and develop high-power, high-brightness blue laser technology, and capital raising to finance the Company through full commercialization; however, the Company’s ability to operate has been significantly impacted by its inability to obtain sufficient financing. The Company is subject to the risks associated with such activities, including the need to further develop its technology and its marketing and distribution channels; further develop its supply chain and manufacturing; and hire additional management and other key personnel. Successful completion of the Company’s development program and, ultimately, the attainment of profitable operations, are dependent upon future events, including its ability to access potential markets and secure long-term financing.

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, rapid technological change, competition from substitute products and larger companies, protection of proprietary technology, ability to maintain distributor relationships and dependence on key individuals.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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 and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 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, 2024, and as subsequently amended by the Form 10-K/As filed with the SEC on April 29, 2024, August 12, 2024, September 6, 2024, and November 8, 2024.

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.

Reclassification

Certain prior period balances in the consolidated statements of cash flows have been combined or reclassified to conform to current period presentation pursuant to Rule 10-01(a)(2) of Regulation S-X of the SEC. Such reclassifications had no impact on net income, cash flows or shareholders' deficit previously reported.

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 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 that 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, 2023 filed with the SEC on April 15, 2024 and as subsequently amended by the Form 10-K/As filed with the SEC on April 29, 2024, August 12, 2024, September 6, 2024, and November 8, 2024. Other than as noted below, the significant accounting policies have not changed significantly since that filing

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

Lessor Accounting

Beginning in 2024, the Company has begun to lease certain of its constructed lasers to its customers, which the Company accounts for under the Financial Accounting Standards Board's (the “FASB”) Accounting Standards Codification (“ASC”) Topic 842 – Leases (“ASC 842”). The Company typically transfers legal ownership of the lasers to its customers at the end of the lease.

The sales and cost of sales are recognized at the inception of the lease, which is when control is transferred to the lessee. The Company accounts for the transfer of control as a sales type lease in accordance with ASC 842-10-25-2. The underlying asset is derecognized, and revenue is recorded when collection of payments is probable. This is in accordance with the revenue recognition principle in FASB ASC 606 – Revenue from contracts with customers. The investment in a sales-type leases consists of the sum of the minimum lease payments receivable less any unearned interest income and estimated executory costs. Minimum lease payments are part of the lease agreement between the Company (as the lessor) and the customer (as the lessee). The discount rate implicit in the lease is used to calculate the present value of minimum lease payments. The minimum lease payments consist of the gross lease payments net of executory costs and contingent rentals, if any. Unearned interest is amortized to income over the lease term to produce a constant periodic rate of return on the net investment in the lease. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income and reduction of receivables.

During the nine months ended September 30, 2024, the Company recog nized $76,744 in revenue at the commencement of the lease for sales-type leases, which is included in revenue in the condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended September 30, 2024, the Company reco gnized $0 and $1,256, res pectively, in interest income for its sales-type leases, which is included in interest income in the condensed consolidated statements of operations and comprehensive loss. As of September 30, 2024, the Company's net investment in sales-type leases is $54,600, which is included in accounts receivable on the consolidated balance sheets.

Convertible Debt

The Company reviews the terms of its convertible notes payable to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and subsequent interim periods, with early adoption permitted. The Company currently evaluating the impact of adopting ASU 2023-07 will have on its consolidated financial statements.

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.

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 currently evaluating the impact this standard will have on its consolidated financial statements and disclosures.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

NOTE 3. REVERSE RECAPITALIZATION

On January 31, 2023, upon the consummation of the Business Combination, all holders of 10,782,091 issued and outstanding shares of Legacy Nuburu common stock and 40,392,723 issued and outstanding shares of Legacy Nuburu preferred stock received shares of Nuburu common stock at a deemed value of $400.00 per share after giving effect to the exchange ratios set forth below (the “Exchange Ratios”):

Legacy Nuburu Class / Series |  | Exchange Ratio |
Legacy Nuburu Common Stock | ​ |  | 0.013 |
Legacy Nuburu Series A Preferred Stock | ​ |  | 0.014 |
Legacy Nuburu Series A-1 Preferred Stock |  |  | 0.015 |
Legacy Nuburu Series B Preferred Stock |  |  | 0.021 |
Legacy Nuburu Series B-1 Preferred Stock |  |  | 0.013 |
Legacy Nuburu Series C Preferred Stock | ​ |  | 0.029 |

This resulted in 783,098 shares of Nuburu Common Stock issued and outstanding as of the Closing and all holders of 7,132,467 issued and outstanding Legacy Nuburu equity awards received Nuburu equity awards covering 91,899 shares of Nuburu Common Stock at a deemed value of $400.00 per share after giving effect to the Exchange Ratios, based on the following events contemplated by the Business Combination Agreement:

•
the cancellation and conversion of all 40,392,723 issued and outstanding shares of Legacy Nuburu preferred stock into 580,943 shares of Nuburu Common Stock at the conversion rate as calculated pursuant to Legacy Nuburu's Certificate of Incorporation, multiplied by the Exchange Ratios at the date and time the Business Combination became effective (“Effective Time”);
•
the cancellation and conversion of all 10,782,091 issued and outstanding shares of Legacy Nuburu common stock into 138,922 shares of Nuburu Common Stock as adjusted by the Exchange Ratios;
•
the net exercise of all 4,000,000 outstanding warrants to purchase shares of Legacy Nuburu common stock immediately prior to the Effective Time in accordance with its terms and subsequent conversion into 29,189 shares of Nuburu Common Stock at the Effective Time;
•
the cancellation and conversion of all Legacy Nuburu Convertible Notes, which were accounted for as liabilities at fair value due to certain variable share settlement features contained within the notes, into shares of Legacy Nuburu common stock in accordance with its terms as of immediately prior to the Effective Time, which 2,642,239 shares were then outstanding as Legacy Nuburu common stock as of immediately prior to the Effective Time and subsequently converted into 34,045 shares of Nuburu Common Stock and 1,361,787 shares of Nuburu Series A preferred stock at the Effective Time; and
•
the cancellation and exchange of all 6,079,467 granted and outstanding vested and unvested Legacy Nuburu options, which became 78,332 Nuburu options exercisable for shares of Nuburu Common Stock with the same terms and vesting conditions except for a number of shares exercisable and the exercise price, each of which was adjusted by the Exchange Ratio; and
•
the cancellation and exchange of all 1,053,000 granted and outstanding vested and unvested Legacy Nuburu RSUs, which became 13,568 Nuburu RSUs for shares of Nuburu Common Stock with the same terms and vesting conditions except for the number of shares, which was adjusted by the Legacy Nuburu common stock Exchange Ratio.

The other related events that occurred in connection with the Closing are summarized below:

•
Tailwind and the Tailwind Sponsor entered into a letter agreement (the “Sponsor Support and Forfeiture Agreement”), dated as of August 5, 2022 (as amended by the Amended and Restated Sponsor Support and Forfeiture Agreement, dated January 31, 2023). In connection with the Business Combination, the 8,355,393 Tailwind Sponsor Class B shares were forfeited other than 28,750 shares of Common Stock (of which, 3,750 shares were transferred to Nautilus Maser Fund, L.P. and 1,250 shares were transferred to Cohen & Company Capital Markets at Closing) and 650,000 shares of Series A preferred stock. Additionally, upon the Closing, the Sponsor cancelled the 9,700,000 Private Placement Warrants that were held by the Sponsor.
•
Tailwind, Legacy Nuburu and Lincoln Park entered into a purchase agreement pursuant to which Nuburu may direct Lincoln Park to purchase up to $100 million of Common Stock from time to time over a 48-month period, subject to certain limitations contained in the Lincoln Park Purchase Agreement. At the Closing, Nuburu issued 5,000 shares of Nuburu Common Stock to Lincoln Park.
•
Legacy Nuburu entered into an engagement letter with Anzu Partners on August 30, 2022 (the “Services Agreement”) relating to this arrangement pursuant to which Legacy Nuburu, in recognition of past Services, (i) agreed to pay $500,000 to Anzu Partners upon the closing of the Business Combination and (ii) issued a warrant with a strike price of $0.01 per share to Anzu Partners for 500,000 shares of Preferred Stock (the “Anzu Partners Warrant”). This warrant was exercised by Anzu Partners in connection with the Closing.

After giving effect to the Business Combination as described above, the number of shares of Common Stock and Series A preferred stock issued and outstanding immediately following the consummation of the Business Combination was as follows:

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

|  | Common Shares |  |  | Series A Preferred Shares |
Tailwind public shares |  |  | 7,905 |  |  |  | — |
Tailwind Sponsor Class B shares |  |  | 208,885 |  |  |  | — |
Total shares of Tailwind common stock outstanding immediately prior to the Business Combination |  |  | 216,790 |  |  |  | — |
Less: forfeiture of the Tailwind Sponsor Class B Common Stock other than 28,750 shares of Common Stock and 650,000 shares of Series A Preferred Stock |  |  | (180,135 | ) |  |  | — |
Tailwind Sponsor Series A Preferred Stock |  |  | — |  |  |  | 650,000 |
Tailwind public shares issuance of Series A Preferred Stock |  |  | — |  |  |  | 316,188 |
Legacy Nuburu shares |  |  | 783,098 |  |  |  | 1,377,265 |
Lincoln Park Commitment Shares |  |  | 5,000 |  |  |  | — |
Anzu Warrant Shares |  |  | — |  |  |  | 500,000 |
Total shares of Nuburu Common Stock outstanding immediately after the Business Combination(1)(2) | ​ |  | 824,752 |  | ​ |  | 2,843,453 |

(1) Excludes 91,899 shares of Common Stock as of the Closing of the Business Combination to be reserved for potential future issuance upon the exercise of Nuburu options or settlement of Nuburu RSUs.

(2) Excludes 417,770 Public Warrants issued and outstanding as of the Closing of the Business Combination.

The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP because Legacy Nuburu has been determined to be the accounting acquirer. Under this method of accounting, Tailwind, which is the legal acquirer, is treated as the accounting acquiree for financial reporting purposes and Legacy Nuburu, which is the legal acquiree, is treated as the accounting acquirer. Accordingly, the consolidated assets, liabilities and results of operations of Legacy Nuburu have become the historical financial statements of Nuburu, and Tailwind’s assets, liabilities and results of operations have been consolidated with Legacy Nuburu’s beginning on the acquisition date. For accounting purposes, the financial statements of Nuburu represent a continuation of the financial statements of Legacy Nuburu with the Business Combination being treated as the equivalent of Legacy Nuburu issuing stock for the net assets of Tailwind, accompanied by a recapitalization. The net assets of Tailwind are stated at historical costs and no goodwill or other intangible assets have been recorded. Operations prior to the Business Combination will be presented as those of Legacy Nuburu in future reports of Nuburu.

Legacy Nuburu was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•
Legacy Nuburu stockholders comprise a majority of the voting power of Nuburu;
•
The Nuburu board of directors consists only of members of the Legacy Nuburu board of directors or nominees selected by Legacy Nuburu;
•
Legacy Nuburu’s operations prior to the acquisition comprise the only ongoing operations of Nuburu;
•
Legacy Nuburu’s senior management comprises the senior management of Nuburu;
•
Nuburu has assumed the Legacy Nuburu name; and
•
Legacy Nuburu’s headquarters have become Nuburu’s headquarters.

All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratios for the equivalent number of shares outstanding immediately after the Closing to effect the reverse recapitalization.

In connection with the Closing of the Business Combination, the Company received net proceeds from the Business Combination totaling $3.2 million, prior to deducting transaction and issuance costs. Legacy Nuburu’s total transaction expenses were approximately $3.2 million and Tailwind’s total transaction expenses were approximately $2.5 million after taking into account waivers of costs incurred by Legacy Nuburu and Tailwind.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

NOTE 4. BALANCE SHEET COMPONENTS

Inventories, Net

Inventories, net as of September 30, 2024 and December 31, 2023 consisted of the following:

​ |  | September 30, 2024 |  |  | December 31, 2023 |
Raw materials and supplies |  | $ | 1,913,013 |  |  | $ | 1,973,634 |
Work-in-process |  |  | 161,137 |  | ​ |  | 158,346 |
Finished goods |  |  | 613,789 |  | ​ |  | 457,752 |
Inventories, gross |  |  | 2,687,939 |  | ​ |  | 2,589,732 |
Less: inventory reserve |  |  | (1,161,469 | ) |  |  | (1,133,457 | )
Inventories, net |  | $ | 1,526,470 |  | ​ | $ | 1,456,275 |

The Company did no t record any lower of cost or net realizable value charges during the three months ended September 30, 2024 and 2023, The Company recorded lower of cost or net realizable value charges of $28,012 and nil d uring the nine months ended September 30, 2024 and 2023, respectively.

Property and Equipment, Net

Property and equipment, net as of September 30, 2024 and December 31, 2023 consisted of the following:

​ |  | September 30, 2024 |  |  | December 31, 2023 |
Machinery and equipment |  | $ | 7,311,625 |  |  | $ | 7,179,629 |
Leasehold improvements |  |  | 897,948 |  | ​ |  | 897,948 |
Furniture and office equipment |  |  | 205,897 |  | ​ |  | 205,897 |
Computer equipment and software |  |  | 197,386 |  | ​ |  | 197,386 |
Property and equipment, gross |  |  | 8,612,856 |  | ​ |  | 8,480,860 |
Less: accumulated depreciation and amortization |  |  | (3,475,821 | ) |  |  | (2,829,884 | )
Property and equipment, net |  | $ | 5,137,035 |  | ​ | $ | 5,650,976 |

Depreciation and amortization expense related to property and equipment was $206,718 and $144,955 during the three months ended September 30, 2024 and 2023, respectively, and $596,256 and $369,971 during the nine months ended September 30, 2024 and 2023, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of September 30, 2024 and December 31, 2023 consisted of the following:

​ |  | September 30, 2024 |  |  | December 31, 2023 |
Prepaid insurance |  | $ | 488,523 |  |  | $ | 61,342 |
Other prepaid assets |  |  | 34,074 |  |  |  | 94,653 |
Other current assets |  |  | 4,464 |  | ​ |  | 260 |
Total prepaid expenses and other current assets |  | $ | 527,061 |  | ​ | $ | 156,255 |

Accrued Liabilities

Accrued liabilities as of September 30, 2024 and December 31, 2023 consisted of the following:

​ |  | September 30, 2024 |  |  | December 31, 2023 |
Accrued payroll and related benefits |  | $ | 403,574 |  |  | $ | 754,904 |
Accrued legal, accounting and professional fees |  |  | 2,500,983 |  | ​ |  | 838,865 |
Accrued transaction costs related to the reverse recapitalization |  |  | 503,600 |  |  |  | 503,600 |
Accrued taxes payable |  |  | 196,842 |  |  |  | 89,346 |
Accrued interest |  |  | 625,599 |  |  |  | 337,913 |
Other |  |  | 212,581 |  | ​ |  | 225,677 |
Total accrued expenses |  | $ | 4,443,179 |  | ​ | $ | 2,750,305 |

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

NOTE 5. 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 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. Level 1 assets include highly liquid bank deposits and money market funds, which were not material as of September 30, 2024 and December 31, 2023. Level 1 liabilities include the Public Warrants and are classified as Level 1 due to the use of an observable market quote in an active market. The Company measured the fair value of the Public Warrants on the date of the Closing of the Business Combination based on the close price of the Public Warrant price. Level 3 liabilities include (i) the Junior Note Warrants (as defined in Note 8, Notes and Convertible Notes Payable), (ii) the August 2024 Convertible Note Derivative Liability (as defined and described in Note 8, Notes and Convertible Notes Payable) and (iii) the Legacy Nuburu Convertible Notes (as described in Note 3, Reverse Recapitaliation), each of which is classified as Level 3 due to the use of unobservable inputs in the valuation of the liability. During the nine months ended September 30, 2024 and 2023, no warrants were exercised.

The gains and losses from re-measurement of Level 1 and Level 3 financial liabilities are recorded as part of change in fair value of warrant liabilities and change in fair value of derivative liability in the condensed consolidated statements of operations and comprehensive loss. 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 liabilities by level within the fair value hierarchy as of September 30, 2024 and December 31, 2023:

​ |  | At September 30, 2024 |
​ |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Public Warrants(1) |  | $ | — |  |  | $ | — |  | ​ | $ | — |  | ​ | $ | — |
Junior Note Warrants |  |  | — |  |  |  | — |  |  |  | 82,333 |  |  |  | 82,333 |
Convertible note derivative liability(2) |  |  | — |  | ​ |  | — |  | ​ |  | 37,900 |  | ​ |  | 37,900 |

​ |  | At December 31, 2023 |
​ |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Public Warrants(1) |  | $ | — |  |  | $ | — |  | ​ | $ | — |  | ​ | $ | — |
Junior Note Warrants |  |  | — |  |  |  | — |  |  |  | 2,238,519 |  |  |  | 2,238,519 |

(1) The Public Warrants are a Level 1 fair value measurement, as noted further below and in Note 10, Warrants, of these consolidated financial statements.

(2) Represents the August 2024 Convertible Note Derivative Liability, as defined and described in Note 8, Notes and Convertible Notes Payable.

On December 12, 2023, the New York Stock Exchange American (“NYSE American”) notified the Company, and publicly announced, 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. As such, the Public Warrants were determined to have no value as of September 30, 2024 and December 31, 2023.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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:

Fair value, September 30, 2023 | ​ | $ | — |
Recognition of Junior Note Warrants upon issuance |  |  | 2,668,169 |
Change in fair value |  |  | (429,650 | )
Fair value, December 31, 2023 | ​ |  | 2,238,519 |
Change in fair value | ​ |  | (3,311 | )
Fair value, March 30, 2024 |  |  | 2,235,208 |
Change in fair value |  |  | (1,783,201 | )
Fair value, June 30, 2024 |  |  | 452,007 |
Change in fair value |  |  | (369,674 | )
Fair value, September 30, 2024 | ​ | $ | 82,333 |

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:

​ |  | Nine Months Ended September 30, 2024 |  | Year Ended December 31, 2023
Common Stock Warrants: | ​ |  |  |  |  |
Stock price |  | $ | 0.03 - 0.51 |  | $ | 0.15 - 0.18
Expected term (in years) |  |  | 4.2 - 4.9 |  |  | 4.9 - 5.0
Expected volatility |  |  | 58.9% - 76.9% |  |  | 66.3%
Risk-free interest rate |  |  | 3.6% - 4.3% |  |  | 3.8% - 4.1%
Expected dividend yield |  |  | 0.0% |  |  | 0.0%

August 2024 Convertible Note Derivative Liability

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

Fair value, June 30, 2024 |  | $ | — |
Initial recognition at fair value |  |  | 179,000 |
Change in fair value |  |  | (141,100 | )
Fair value, September 30, 2024 | ​ | $ | 37,900 |

The aggregate fair value of the August 2024 Convertible Note Derivative Liability 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 August 2024 Convertible Note Derivative Liability during the nine months ended September 30, 3034 were as follows:

​ |  | Nine Months Ended September 30, 2024
August 2024 Convertible Note Derivative Liability: | ​ |  |
Stock price |  | $ | $0.51 - $1.82
Expected term (in years) |  |  | 0.35 - 0.46
Expected volatility |  |  | 253.0% - 285.4%
Risk-free interest rate |  |  | 4.6% - 5.0%
Expected dividend yield |  |  | 0.0%

Legacy Nuburu Convertible Notes

The following table sets forth a summary of the changes in fair value of the Company's Legacy Nuburu Convertible Notes, which were cancelled and converted into shares of Legacy Nuburu common stock in connection with the Business Combination:

Fair value, January 1, 2023 | ​ | $ | 22,688,097 |
Cancellation and convsion in connection with the Business Combination |  |  | (22,688,097 | )
Fair value as of March 31, 2023 | ​ | $ | — |

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

NOTE 6. COMMITMENTS AND CONTINGENCIES

Operating Lease

The Company leases office space in Centennial, Colorado under a noncancelable operating lease agreement. The Company leases and occupies approximately 27,900 square feet of office space. 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 September 30, 2024, 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 of September 30, 2024 and December 31, 2023, the weighted-average remaining lease term was 0.8 ye ars and 1.5 years, respectively, and the discount rate use d was 7.0% as of each respective date.

During the periods presented, the Company recognized the following lease costs arising from the lease transaction:

​ | ​ | Three Months Ended September 30, |  | ​ | Nine months ended September 30, |
​ |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Operating lease cost | ​ | $ | 102,938 |  | ​ | $ | 85,036 |  | ​ | $ | 308,814 |  | ​ | $ | 255,109 |

The Company recognized the following cash flow transactions arising from lease transactions:

​ | ​ | Nine months ended September 30, |
​ |  | 2024 |  |  | 2023 |
Cash paid for amounts included in the measurement of lease liabilities | ​ | $ | 287,537 |  | ​ | $ | 279,160 |

On September 30, 2024, the future payments and interest expense for the operating leases are as follows:

Year Ending December 31, | ​ | Future Payments |
2024 | ​ | $ | 95,846 |
2025 | ​ |  | 240,834 |
Total undiscounted cash flows |  |  | 336,680 |
Less: imputed interest |  |  | (8,126 | )
Present value of lease liabilities | ​ | $ | 328,554 |

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. At September 30, 2024 and December 31, 2023, the Company was not involved in any material legal proceedings.

Purchase Commitments

As of September 30, 2024, the Company had approximatel y $467,000 in outst anding firm purchase commitments to acquire inventory and research and development parts from suppliers for the Company's ongoing operations.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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 disaggregated by geography:

​ | ​ | Three Months Ended September 30, |  | ​ | Nine Months Ended September 30, |
​ |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
United States | ​ | $ | — |  | ​ | $ | 186,743 |  | ​ | $ | 15,000 |  |  | $ | 1,423,809 |
Asia |  |  | — |  | ​ | — |  |  |  | 9,112 |  |  |  | 116,485 |
Europe | ​ |  | — |  | ​ | — |  | ​ |  | 118,715 |  |  |  | 170,500 |
Total | ​ | $ | — |  | ​ | $ | 186,743 |  | ​ | $ | 142,827 |  |  | $ | 1,710,794 |

Revenue from contracts with customers are disaggregated as follows:

​ | ​ | Three Months Ended September 30, |  | ​ | Nine months ended September 30, |
​ |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Revenue recognized at a point in time | ​ | $ | — |  | ​ | $ | 186,743 |  | ​ | $ | 123,827 |  | ​ | $ | 1,705,794 |
Revenue recognized over time | ​ |  | — |  | ​ |  | — |  | ​ |  | 19,000 |  | ​ |  | 5,000 |
Total | ​ | $ | — |  | ​ | $ | 186,743 |  | ​ | $ | 142,827 |  | ​ | $ | 1,710,794 |

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

| ​ | Accounts Receivable |  | ​ | Contract Liabilities |
January 1, 2023 | ​ | $ | 327,200 |  | ​ | $ | 178,750 |
December 31, 2023 |  |  | 482,279 |  |  |  | 30,400 |
September 30, 2024 | ​ |  | 54,600 |  | ​ |  | 24,000 |

During the three months ended September 30, 2024 and 2023 the Company recognized no revenues that was included in the contract liabilities balance at the beginning of the period. During the nine months ended September 30, 2024 and 2023, the Company recognized $30,400 an d $32,500 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 September 30, 2024 and December 31, 2023, the Company's outstanding debt consisted of the following:

​ |  | September 30, 2024 |  |  | December 31, 2023 |
Current portion of notes payable: |  |  |  |  |  |
Junior Notes Issued November 2023 |  | $ | 3,182,855 |  |  | $ | 5,500,000 |
August 2024 Convertible Notes |  |  | 673,000 |  |  |  | - |
Additional August 2024 Convertible Notes |  |  | 687,315 |  |  |  | - |
Unamortized debt discount and deferred financing costs |  |  | (311,129 | ) | ​ |  | (3,352,008 | )
Current portion of notes payable |  |  | 4,232,041 |  | ​ |  | 2,147,992 |
Long-term portion of notes payable: |  |  |  |  |  |
Senior Convertible Notes Issued June 2023 |  |  | 4,511,880 |  |  |  | 6,713,241 |
Total debt |  | $ | 8,743,921 |  |  | $ | 8,861,233 |

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

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

is approved by the Company's stockholders), which will be 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 are junior and secured by the Company's patent portfolio pursuant to a security agreement among the parties (the "Security Agreement"). The Junior Notes will 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 contain customary events of default. If the Junior Notes have not been repaid within six or nine months after issuance, the Junior Notes will begin to bear interest at the SOFR rate plus 9% and at the SOFR rate plus 12%, respectively, and an additional 25% warrant coverage will be provided 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 will be 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.

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 total discount is amortized over the term of the Junior Notes in accordance with FASB ASC 835 - Interest.

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

Noteholder | September 30, 2024 |  | ​ | December 31, 2023 |
David Seldin(1) | $ | — |  |  | $ | 1,100,000 |
Eunomia, LP(2) |  | 1,100,000 |  | ​ |  | 1,100,000 |
CST Global LLC(3) |  | — |  |  |  | 220,000 |
Total Junior Notes - related parties | $ | 1,100,000 |  |  | $ | 2,420,000 |

(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.
(2)
Ron Nicol, manager of Eunomia, LP, is the Executive Chairman of the Company’s board of directors.
(3)
David Michael, an affiliate of CST Global LLC, was a member of the Legacy Nuburu board of directors.

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 bear 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 are 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 may be applied to any outstanding borrowings (in the case of an event of default only) and the investor may declare all outstanding principal plus accrued interest immediately due. Additionally, at any point after issuance, the investor has 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 are (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 is approved by stockholders and (iii) required to be registered with the SEC for resale. With certain exceptions, the Company is prohibited from issuing new securities until such stockholder approval is obtained and the registration statement registering the securities issuable under such notes has been effective for a period of at least 30 days (the “Restricted Period”). As of September 30, 2024, the effective interest rate of the August 2024 Convertible Notes was 180.2%, which reflects the impact of the August 2024 Convertible Note Derivative Liability, defined and described below.

As required under the terms of the August 2024 Convertible Notes, the Company called a stockholder meeting to approve the securities issuable upon conversion of such notes. However, the Company was unable to achieve quorum and was forced to delay obtaining such approval. Further, while the Company timely filed a registration statement for the resale of shares issuable on conversion, it has not yet been declared effective by the SEC. As a result, the Company is currently in default under the terms of such notes.

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 5.

The Company incurred $114,800 in debt issuance 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 $7,691 and was recorded as a debt issuance cost. For additional information regarding these warrants, see Note 10.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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 may be prepaid at any time without penalty, do not accrue interest, mature on February 6, 2025 and may 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 are unsecured and subordinated to the Company’s outstanding senior convertible notes and junior bridge notes in right of payment, whether in respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.

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 W arrants," 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.

The Senior Convertible Notes are senior, secured obligations of the Company, which became secured by the Company's patent portfolio per the Security Agreement as of November 2023, bear interest at the rate of 7.0% per annum, and are 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 are senior to the Junior Notes pursuant to an intercreditor agreement between the parties. The Senior Convertible Notes may 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. In the event of the Sale of the Company (as defined in the Senior Convertible Notes), the outstanding principal amount of each Senior Convertible Note, plus all accrued and unpaid interest not otherwise converted into equity securities pursuant to the terms of the Senior Convertible Notes, shall (i) if the Investor so elects, be converted into equity securities pursuant to the terms of the Senior Convertible Notes at a price equal to $27.52 per share (subject to appropriate adjustment from time to time for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event), or (ii) be due and payable immediately prior to the closing of such Sale of the Company, together with a premium equal to 150% of the principal amount to be prepaid.

As further described above, during August 2024, $687,000 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.

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

Investor | September 30, 2024 |  | ​ | December 31, 2023 |
Wilson-Garling 2023 Family Trust(1) | $ | 5,000,000 |  | ​ | $ | 5,000,000 |
David Seldin(2) |  | — |  | ​ |  | 1,200,000 |
Eunomia, LP(3) |  | 1,000,000 |  |  |  | 1,000,000 |
Curtis N Maas Revocable Trust(4) |  | 100,000 |  |  |  | 100,000 |
Total Senior Convertible Notes - related parties | $ | 6,100,000 |  |  | $ | 7,300,000 |

(1)
Thomas J. Wilson, an affiliate of Wilson-Garling 2023 Family Trust, was a member of the Legacy Nuburu board of directors.
(2)
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.
(3)
Ron Nicol, manager of Eunomia, LP, is the Chairman of the Company’s board of directors.
(4)
Curtis Maas, an affiliate of the Curtis N Maas Revocable Trust, was a member of the Legacy Nuburu board of directors.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

Extinguishments

During the three and nine months ended September 30, 2024, the Company issued 2,399,850 and 4,648,162 shares, respectively, to noteholders to extinguish an aggregate $0.7 million and $4.8 million, respectively, of principal and accrued interest under the Senior Notes and Junior Notes. The reacquisition value of the debt was higher than the related carrying value, and thus resulted in an aggregate net loss on debt extinguishment of $1,165,585 and $11,511,693, respectively, recorded in the condensed consolidated statement of operations.

NOTE 9. CONVERTIBLE PREFERRED STOCK

Legacy Nuburu Preferred Stock Financing

In multiple closings in December 2021 and January 2022, Legacy Nuburu sold an aggregate of 1,166,372 shares of Legacy Nuburu Series C Preferred Stock, at a purchase price of $5.00 per share, for an aggregate purchase price of approximately $5.8 million.

Series A Preferred Stock

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

The Preferred Stock is convertible at any time into Common Stock at a conversion rate equal to $0.25 (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”).

Any conversion will be settled only in shares of Common Stock; provided, that, upon any conversion that would result in the holders beneficially owning greater than 9.99% of the Company’s voting stock outstanding as of the conversion date or any individual holder beneficially owning Common Stock in excess of the maximum number of shares of Common Stock that could be issued to the holder without triggering a change of control under the applicable stock exchange listing rules, the excess, if any, of the conversion consideration otherwise payable upon such conversion shall be paid in cash, based on an amount per share of Common Stock equal to the last reported price per share of the Common Stock on the trading day immediately preceding the conversion date.

Mandatory Conversion

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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.

Series A Preferred Stock Issuances

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 September 30, 2024 and December 31, 2023, there were 2,388,905 shares of preferred stock issued and outstanding.

Upon the Closing of the Business Combination, all 23,237,703 shares of issued and outstanding convertible preferred stock were cancelled and converted into 580,943 shares of Legacy Nuburu common stock based upon the conversion rate as calculated pursuant to Legacy Nuburu's Certificate of Incorporation, multiplied by the Exchange Ratios at the Effective Time.

Additionally, upon the Closing of the Business Combination, the cancellation and conversion of all Legacy Nuburu Company Notes into shares of Legacy Nuburu common stock in accordance with its terms as of immediately prior to the Effective Time resulted in the issuance of 2,642,239 shares which were then outstanding as Legacy Nuburu common stock as of immediately prior to the Effective Time and subsequently converted into 34,045 shares of Nuburu Common Stock and 1,361,787 shares of Nuburu Series A preferred stock at the Effective Time.

As of the Closing, each Legacy Nuburu stockholder waived its right to participate in the Preferred Stock Issuance (for clarity, excluding any shares received as a result of the conversion of any Legacy Company Notes prior to the Closing, which were entitled to participate in the Preferred Stock Issuance). Legacy Nuburu stockholders were entitled to receive approximately 99% of the Common Stock issued as merger consideration pursuant to the Business Combination Agreement agreed to waive such right by entering into the Stockholder Support Agreement (for clarity, excluding any shares received as a result of the conversion of any Legacy Company Notes). Those Legacy Nuburu stockholders who did not waive their right to participate resulted in the issuance of 15,478 shares of Nuburu Series A preferred stock at the Effective Time.

Each Tailwind stockholder who did not redeem their shares received a share of Nuburu Series A preferred stock. This resulted in the issuance of 316,188 shares of Nuburu Series A preferred stock to those non-redeeming stockholders.

Tailwind and the Tailwind Sponsor entered into the Sponsor Support and Forfeiture Agreement. In connection with the Business Combination, the 8,355,393 Founder Shares were forfeited other than 28,750 shares of Common Stock (of which, 3,750 shares were transferred to Nautilus Maser Fund, L.P. and 1,250 shares were transferred to Cohen & Company Capital Markets at Closing) and 650,000 shares of Series A preferred stock.

Wilson Sonsini Goodrich & Rosati, Professional Corporation (“WSGR”) was engaged by Legacy Nuburu to act as its counsel for the Business Combination. As partial compensation for the services provided by WSGR to Legacy Nuburu in connection with the Business Combination, the Company agreed to issue to WSGR 4,887 shares of Common Stock and 195,452 shares of Preferred Stock pursuant to the terms of the Stock Purchase Agreement entered into by and between the Company and WSGR on March 10, 2023. The foregoing issuance was made in a transaction not involving a public offering pursuant to an exemption from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.

Legacy Nuburu entered into an engagement letter with Anzu Partners on August 30, 2022 pursuant to which Legacy Nuburu, in recognition of past Services, (i) agreed to pay $500,000 to Anzu Partners upon the closing of the Business Combination and (ii) issued a warrant with a strike price of $0.01 per share to Anzu Partners for 500,000 shares of Preferred Stock (the “Anzu Partners Warrant”). This warrant was exercised by Anzu Partners in connection with the Closing and the $500,000 payment was made during 2023.

Conversions

In November 2023, a holder of Series A Preferred Stock converted 650,000 shares of Series A Preferred Stock to 32,500 shares of Common Stock under the terms described under "Conversion Rights" above.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

NOTE 10. WARRANTS

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

​ |  | September 30, 2024 |  |  | December 31, 2023 |
Liability classified warrants: |  |  |  |  |  |  |  |
Junior Note Warrants |  |  | $ | 859,315 |  |  |  | $ | 550,000 |
Public Warrants |  |  |  | 417,770 |  |  |  |  | 417,770 |
Total liability-classified warrants outstanding |  |  | $ | 1,277,085 |  |  |  | $ | 967,770 |
Equity classified warrants: |  |  |  |  |  |  |  |
June 2023 Senior Note Warrants |  |  | $ | 335,210 |  |  |  | $ | 335,210 |
Pre-Funded Warrants |  |  |  | 837,116 |  |  |  |  | - |
August 2024 Warrants Issued with Junior Notes |  |  |  | 19,892 |  |  |  |  | - |
Total equity-classified warrants outstanding |  |  | $ | 1,192,218 |  |  |  | $ | 335,210 |

Liability Classified Public 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 384,233 additional warrants pursuant to the Junior Note Purchase Agreements during the nine months ended September 30, 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.

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 September 30, 2024, all 417,770 Public Warrants remain outstanding. However, on December 12, 2023, the NYSE American notified the Company and publicly announced that the NYSE American had determined to (a) commence proceedings to delist the Company’s Public Warrants, each whole Public Warrant exercisable to purchase one share of Common Stock at a price of $460.00 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. As such, the Public Warrants were determined to have no value in the financial statements as of September 30, 2024.

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 warrant holder may exercise its Public Warrants only for a whole number of shares of Common Stock. The Public Warrants 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:

•
in whole and not in part;
•
at a price of $0.40 per warrant;
•
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

•
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:

•
in whole and not in part;
•
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;
•
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
•
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 the 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 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:

​ |  | Issuance Date |
Common Stock Warrants: | ​ |  |  |
Expected term (in years) |  |  |  | 5.0 |
Expected volatility |  |  | 47.9% |
Risk-free interest rate |  |  | 4.0% |
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.

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 may sell and the investors may acquire pre-funded warrants, up to a total purchase price to the Company equal to $15 million. The exercise price for the 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 will also receive 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 will be entered into on terms agreed by the parties; provided however, that in no case will 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 may also voluntarily convert outstanding notes previously issued by the Company; provided that such transactions, as a whole, may not result in an effective direct or indirect discount to market price to the investors of greater than 30%.

During the three and nine months ended September 30, 2024, the Company issued 665,410 and 837,116 pre-funded warrants, respectively, for total cash proceeds of $600,000 and $2,139,866, respectively, in pre-funded warrants pursuant to the Program. Each pre-funded warrant entitles the holder to purchase one share of common stock at an exercise price ranging from 125% to 140% of the relevant pre-funded warrant purchase price. The pre-funded warrant is exercisable any time after issuance through five years. No pre-funded warrants were exercised during the periods presented. The proceeds from the issuance of the pre-funded warrants were recorded to additional paid-in capital in the condensed consolidated balance sheets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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 $7,691 and was recorded as a debt issuance cost and associated additional paid-in capital in the condensed 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 September 30, 2024, 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 September 30, 2024, there are approx imately 67,000 share s available for grant under the 2022 Plan and approximately 10,000 shar es available for grant under the ESPP.

Stock-Based Compensation Expense

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

​ | ​ | Three Months Ended September 30, |  | ​ | Nine months ended September 30, |
​ |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Cost of revenue | ​ | $ | 118,774 |  | ​ | $ | 167,899 |  | ​ | $ | 364,286 |  |  | $ | 522,627 |
Research and development |  | $ | 112,528 |  | ​ | $ | 145,848 |  |  | $ | 378,442 |  |  | $ | 480,131 |
Selling and marketing |  | $ | 9,371 |  |  | $ | 81,901 |  |  | $ | (189,828 | ) |  | $ | 181,413 |
General and administrative | ​ | $ | 206,932 |  | ​ | $ | 239,380 |  | ​ | $ | 959,392 |  |  | $ | 711,618 |
Total stock-based compensation expense | ​ | $ | 447,605 |  | ​ | $ | 635,028 |  | ​ | $ | 1,512,292 |  |  | $ | 1,895,789 |

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 September 30, 2024 and 2023, stock-based compensation relating to stock-based awards granted to consultants wa s $40,993 and $149,434, respectively. During the nine months ended September 30, 2024 and 2023, stock-based compensation relating to stock-based awards granted to consultants was $152,010 and $411,602, 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.

​ | ​ | RSUs |
​ |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested at December 31, 2023 |  |  | 22,213 |  | ​ | $ | 208.80 |
RSUs granted |  |  | 45,725 |  |  | $ | 5.38 |
RSUs vested |  |  | (51,507 | ) |  | $ | 20.37 |
RSUs forfeited |  |  | (9,811 | ) |  | $ | 95.42 |
Unvested at September 30, 2024 |  |  | 6,620 |  |  | $ | 198.87 |

The total grant date fair value of RSUs awarded was $246,000 and $1,709,217 for the nine months ended September 30, 2024 and 2023, respectively. The total grant date fair value of RSUs vested was $1,049,265 and $1,490,805 for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, total unrecognize d stock-based compensation costs related to RSUs were $1,277,653, which are expected to be recognized over a remaining weighted average period of 1.53 years. As of September 30, 2024, all of the outstanding RSUs are expected to vest.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

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, 2023 | ​ |  | 188,865 |  | ​ | $ | 74.41 |  |  |  | 7.9 |  | ​ | $ | — |
Options granted |  |  | 29,841 |  |  | $ | 5.46 |  |  |  |  |  |  |
Options exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |
Options cancelled or forfeited |  |  | (33,064 | ) |  | $ | 151.39 |  |  |  |  |  |  |
Options outstanding at September 30, 2024 |  |  | 185,642 |  |  | $ | 49.61 |  |  |  | 8.3 |  |  | $ | — |
Options exercisable at September 30, 2024 |  |  | 96,311 |  |  | $ | 71.87 |  |  |  | 7.7 |  |  | $ | — |
Options vested and expected to vest at September 30, 2024 |  |  | 185,642 |  | ​ | $ | 49.61 |  |  |  | 8.3 |  | ​ | $ | — |

The weighted-average grant date fair value of options granted to employees and consultants was $5.46 and $0.50 per share for the nine months ended September 30, 2024 and 2023, respectively.

Aggregate intrinsic value represents the difference between the estimated fair value of the underlying Common Stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic value of options exercised wa s nil a nd $1,040 for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, total unrecognized stock-based compensation cost related to stock options was $898,238, which is expected to be recognized over a weighted-average period of 2.4 yea rs.

Determining the appropriate fair value of stock based awards requires the input of subjective assumptions including the fair value of the Company’s Common Stock, the expected life of the option, and expected stock price volatility. The Company used the Black Scholes option pricing model to value its stock option awards.

The Company estimates the fair value of the options utilizing the Black-Scholes option pricing model, which is 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 are as follows:

​ | ​ | Nine Months Ended September 30,
​ |  | 2024 |  | 2023
Expected term (in years) | ​ | 4 | ​ | 1.0 - 5.0
Expected volatility |  | 47.8% - 55.0% |  | 44.9% - 47.4%
Risk-free interest rate |  | 4.0% - 4.5% |  | 3.8% - 5.4%
Expected dividend yield |  | 0.0% | ​ | 0.0%

Common Stock Issued for Services

During the three months ended September 30, 2024, the Company paid for certain services through the issuance of 12,500 fully vested common stock. The common stock awards are equity-classified, and compensation expense was recognized based on the fair value of the Company's common stock on the date of issuance. Stock-based compensation expense associated with the awards was immaterial for the nine months ended September 30, 2024.

NOTE 12. INCOME TAX

Due to its current operating losses, the Company recorded zero income tax expense during the three and nine months ended September 30, 2024 and 2023. 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

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

September 30, 2024. 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 September 30, 2024 and December 31, 2023 the limitation does not affect the Company's results of operations for the periods presented.

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 and nine months ended September 30, 2024 and 2023 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:

​ | ​ | Nine Months Ended September 30, |
​ |  | 2024 |  |  | 2023 |
Stock options outstanding | ​ |  | 185,642 |  | ​ |  | 195,656 |
Junior Note Warrants |  |  | 859,315 |  |  |  | — |
Public Warrants |  |  | 417,770 |  |  |  | 417,770 |
June 2023 Senior Note Warrants |  |  | 335,210 |  |  |  | 335,211 |
Pre-Funded Warrants |  |  | 837,116 |  |  |  | — |
August 2024 Warrants Issued with Junior Notes |  |  | 19,892 |  |  |  | — |
Unvested restricted stock units |  |  | 6,620 |  |  |  | 23,901 |
If-converted Common Stock from Series A Preferred Stock(1) |  |  | 119,445 |  |  |  | 151,945 |
If-converted Common Stock from convertible notes |  |  | 32,932,138 |  |  |  | 335,661 |
Total |  |  | 35,713,148 |  | ​ |  | 1,460,144 |

(1) Assumes that all shares of Series A Preferred Stock are converted into Common Stock at a conversion rate equal to $0.25 divided by $5.00 (as adjusted by the Reverse Stock Split), representing the maximum number of shares issuable to holders of Series A Preferred Stock.

NOTE 14. SECURITIES PURCHASE AGREEMENT

On April 3, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors pursuant to which such investors agreed to purchase from the Company $3,000,000 of newly issued shares (the “Shares”) of the Company’s Common Stock, at a per Share purchase price of $5.00 per Share, or 600,000 shares.

Only a portion of the purchase price ($644,936) has been advanced and the Company has issued a notice of default to the investors for failure to fully fund the purchase price.

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

Restatement Background

On October 21, 2024, the Board of Directors and management, upon the recommendation of the Audit Committee of the Board of Directors, concluded that the Company’s previously issued financial statements as of and for the year ended December 31, 2023, the comparative period therein as of and for the year ended December 31, 2022 and unaudited condensed consolidated financial statements as of and for each of the interim quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, and June 30, 2024 should no longer be relied upon due to errors that are described below and that such financial statements should be restated. The Company evaluated the materiality of these errors 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 these corrections was material to each period discussed above. As a result, the Company has restated previously issued financial statements in accordance with ASC 250, Accounting Changes and Error Corrections, as reflected in Amendment No. 4 to the Annual Report on Form 10-K for the year ended December 31, 2023 filed on November 8, 2024 (the “Amended 10-K”), Amendment No. 1 to the Quarterly Report on Form 10-Q for the three months ended March 31, 2024 filed on November 14, 2024, and Amendment No. 1 to the Quarterly Report on Form 10-Q for the three months ended June 30, 2024 filed on November 14, 2024.

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NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (As Restated)

We have determined that these errors were the result of a material weakness in internal control over financial reporting that is reported in management’s report on internal control over financial reporting as of December 31, 2023 in Part II, Item9A, “Controls and Procedures” of the Amended 10-K and Item 4 of this report .

The Company has not filed, and does not intend to file, amendments to the previously filed Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September, 2023, but instead has restated its unaudited interim condensed consolidated financial statements in the Amended 10-K filed November 8, 2024.

The restatements of the Company's previously issued financial statements include the (i) reclassification of convertible preferred stock that is redeemable at a future point in time from permanent equity to mezzanine equity and (ii) increase in the carrying value of such preferred stock to reflect the redemption value of the outstanding preferred stock. Additionally, the impact of the loss recorded during the year ended December 31, 2022 related to the accounting for the Legacy Nuburu Convertible Notes (as described in Note 8) at fair value is reflected as an adjustment to accumulated deficit for the restated periods.

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

NOTE 16. SUBSEQUENT EVENTS

On October 1, 2024, the Company entered into a master transaction terms agreement (the “Master Agreement”) with Liqueous LP, (the “Investor”) pursuant to which, the Company and the Investor established a strategic financing framework for short-term and long-term financing for the Company. The Master Agreement provides for: (i) an immediate capital infusion from the Investor of $3.0 million at current market price, (ii) subsequent weekly capital infusions of $1,250,000 at market price until an additional $10.0 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 the Investor having a current cash value of approximately $2.2 million; and (v) the implementation of a $50 million equity line of credit (the “ELOC”) pursuant to which the Company may require the Investor to purchase common stock from time-to-time in the amounts and for the prices determined in accordance with the terms of the ELOC. Before the ELOC may be fully utilized, shares subject to the ELOC must be registered for resale and the Company must obtain consent from stockholders to issue shares in excess of 19.99% of the Company’s common stock as of the date of the ELOC. The Investor was also required to engage in good faith best efforts to prepay or otherwise acquire outstanding notes held by Esousa, given among other things the failure to achieve quorum at the special meeting called to approve the Esousa transaction and the restrictions on the issuance of additional shares until after such time as such stockholder approval is obtained. The full initial amounts due under the Master Agreement were not yet paid to the Company and Esousa’s notes remained outstanding, when the Company received claims from certain existing investors alleging that the Master Agreem ent violated the terms of their existing investments and Esousa enjoined us from issuing future securities, with certain exceptions, during the Restricted Period. The Company called a special stockholder meeting to approve the securities issuable upon conversion of the Esousa notes, which had been scheduled to take place on September 27, 2024. The proxy statement relating to such meeting requested approval of securities issuances in other capital raising transactions as well, which would have facilitated certain transactions under the Master Agreement. However, the Company was unable to achieve quorum and was forced to adjourn, and then ultimately cancel, the special meeting. The Company timely filed a registration statement, which it anticipates will be effective during the fourth quarter of 2024 and has filed a proxy statement for a second stockholder meeting to approve, among other things, the issuances of shares in connection with the Esousa and Liqueous transactions, which is scheduled to take place on December 27, 2024. The Company has negotiated financing transactions that would provide capital necessary to continue its path to commercialization; however, if the Company is unable to obtain the required stockholder approval to issue additional securities (and consent from certain investors with additional contractual rights to the extent required) or the counter parties do not perform under the terms of such financing agreements, the Company will not be able to sustain operations and will need to consider alternatives, which could include a sale, liquidation, or dissolution of the business or a foreclosure by its senior secured creditors.

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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 contained in this report and the financial statements and notes thereto for the year ended December 31, 2023, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Amended 10-K. 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 Amended 10-K 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.

Company Overview

Nuburu, Inc. is a leading innovator in high-power, high-brightness blue laser technology that is focused on bringing breakthrough improvements to a broad range of high-value applications, including welding and 3D printing. By delivering increased speed and quality we hope to enhance productivity and cost efficiency for manufacturers in the e-mobility, consumer electronics, aerospace and defense, and 3D printing markets, as well as to find additional applications currently not yet serviced by existing laser technologies.

We have invented, patented, and developed what we believe to be the next pivotal point for manufacturing technology, with the potential to revolutionize the manufacturing industry by changing how products are made. Our technology is also aligned with the need to reduce carbon generation in manufacturing. The Nuburu laser system outperforms currently available alternatives by more efficiently coupling heat into the material being processed, thereby helping to promote a more sustainable future by using less energy and, in turn, generating less carbon in the manufacturing process.

A fundamental physical characteristic is that metals absorb blue laser light better than infrared laser light. In the case of materials such as gold, copper, silver and aluminum, the advantage of blue laser light is substantial. The better absorption results in substantial improvements in the quality of the part produced, the yield of parts during production and the speed at which the part can be produced. We believe that these advantages enable efficiencies in the overall productivity of the manufacturing line and can extend the life of the products produced. We also believe that these characteristics will be advantageous to our customers, whether in upgrading existing manufacturing processes or enabling entirely new approaches to manufacturing through the use of Nuburu’s laser systems in either industrial welding or 3D printing technology applications.

Nuburu provides blue laser systems for welding applications such as batteries, large screen displays, and cell phone components. Nuburu has over 220 granted and pending patents and patent applications globally, which include: blue laser applications such as welding, blue laser technologies, single mode blue laser technology, blue Raman laser technologies, addressable array technologies, and 3D printing using blue lasers. Notably, Nuburu has been awarded patent protection for the use of high-power blue lasers.

Given the size, complexity and value of our blue laser technology, our sales to date have come from long-term discussions between our management team and our current customers. Based on our experiences so far, we expect the approximate adoption timelines of our customers from first contact to first purchase order to range up to 22-24 months. Going forward, we intend to expand our marketing efforts, as we pursue a more widespread adoption of our blue laser technology.

We have developed and trained and expect to continue to develop and train third-party distributors that provide sales and customer support functions in their specific territory, including business development and sales, application and service support and local marketing. Our distributors are, and are expected to be, an integral part of our sales and marketing strategy. The Americas region is managed from our headquarters, but we have distributor partners located in key countries worldwide to help target current and prospective customers in Asia (particularly in China, Japan, Singapore, South Korea, India, and Taiwan) and in Europe.

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, management negotiated several funding agreements with multiple investors. Certain of these investors have not fully performed their obligations under such agreements and the Company has been unable to obtain stockholder approval necessary to consummate certain transactions because it was unable to achieve quorum for the special meeting of stockholders called for such purpose. As a result, the Company has not received the funding necessary to maintain operations, fill orders or implement its sales and marketing program. Given the lack of funding, management initiated measures designed to reduce costs, which included implementing a furlough of employees. This significantly impacted commercialization and operations, particularly in the third quarter of 2024. In response to the furloughs and financing challenges, several key employees have resigned entirely. The Company has negotiated financing transactions that would provide capital necessary to continue its path to commercialization and has now filed two proxy statements soliciting consent from stockholders for the issuances of shares pursuant to such transactions; however, if investors do not perform under the terms of such agreements, or the Company is unable to obtain the required stockholder approval to issue additional securities (or consent from certain investors with additional contractual rights to the extent required), the Company will not be able to sustain operations and will need to consider alternatives, which could include a sale, liquidation, or dissolution of the business.

We generated total revenue of nil and $186,743 and had net losses of $4,377,522 and $5,085,301 during the three months ended September 30, 2024 and 2023, respectively. During the nine months ended September 30, 2024 and 2023, we generated total revenue of $142,827 and $1,710,794 and had net losses $22,765,563 and $15,959,530, respectively.

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

•
continue our research and development efforts;
•
seek to commercialize our products; and
•
operate as a public company.

Accordingly, we will continue to 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, or counter parties to such agreements may not perform. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition.

The Business Combination

On January 31, 2023, we consummated the Business Combination.

Being an SEC-registered and publicly traded company has required us to hire additional personnel and to implement procedures and processes to address public company regulatory requirements and customary practices. Compared to the operations of Legacy Nuburu, we have incurred and expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal, and administrative resources, including increased personnel costs, audit and other professional service fees.

Recent Developments

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").

April 2024 SPA Agreement

On April 3, 2024, we entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors named therein pursuant to which the investors agreed to purchase from the Company $3,000,000 of newly issued shares (the “Shares”) of the Company’s Common Stock, at a per Share purchase price of $5.00 per Share. Only a portion of the purchase price ($644,936) has been advanced. In October 2024, a notification of default was sent to the investors for failure to provide the remainder of the purchase price.

Warrant Issuances and Note Extinguishments

Pre-Funded Warrants

On May 1, 2024, we entered into a Pre-Funded Warrant Purchase Program (the “Program”) with strategic investors, pursuant to which from time-to-time the Company may sell and the investors may acquire pre-funded warrants, up to a total purchase price to the Company equal to $15 million. The exercise price for the 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 will also receive 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 will be entered into on terms agreed by the parties; provided however, that in no case will 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 may also voluntarily convert outstanding notes previously issued by the Company; provided that such transactions, as a whole, may not result in an effective direct or indirect discount to market price to the investors of greater than 30%.

During the three and nine months ended September 30, 2024, the Company issued 665,410 and 837,116 pre-funded warrants, respectively, for total cash proceeds of $600,000 and $2,139,866, respectively, in pre-funded warrants pursuant to the Program. Each pre-funded warrant entitles the holder to purchase one share of common stock at an exercise price ranging f rom 125% to 140% of the relevant pre-funded warrant purchase price. The pre-funded warrant is exercisable any time after issuance through five years. No pre-funded warrants were exercised during the periods presented. The proceeds from the issuance of the pre-funded warrants were recorded to additional paid-in capital in the condensed consolidated balance sheets.

Additional Warrant Issuances

Further, during the nine months ended September 30, 2024, the Company issued certain additional warrants. For additional information, see notes 8 and 10 to the condensed consolidated financial statements.

Note Extinguishments

During the three and nine months ended September 30, 2024, the Company issued 2,399,850 and 4,648,162 shares, respectively, to noteholders to extinguish an aggregate $0.7 million and $4.8 million, respectively, of principal and accrued interest under the Senior Notes and Junior Notes.

August 2024 Convertible Notes

On August 6, 2024 and August 19, 2024, the Company entered into the August 2024 Convertible Note Agreement with Esousa for the sale of 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 bear 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 are 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

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of an additional 5% per annum may be applied to any outstanding borrowings and the investor may declare all outstanding principal plus accrued interest immediately due. As of September 30, 2024, the effective interest rate of the August 2024 Convertible Notes was 180.2%. Additionally, at any point after issuance, the investor has 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 are (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 is approved by stockholders, and (iii) required to be registered with the SEC for resale. While the Company called a special meeting to obtain the required stockholder approval, it was unable to achieve quorum and was forced to adjourn, and then ultimately cancel, the special meeting, which results a default under the terms of the notes issued to Esousa.

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 the Additional August 2024 Convertible Notes. The Additional August 2024 Convertible Notes may be prepaid at any time without penalty, do not accrue interest, mature on February 6, 2025 and may 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 are unsecured and subordinated to the Company’s outstanding senior convertible notes and junior bridge notes in right of payment, whether in respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.

Long-Term Funding Program

On October 1, 2024, the Company entered into the Master Agreement with Liqueous LP (the “Investor”) pursuant to which, the Company and the Investor established a strategic financing framework for short-term and long-term financing for the Company. The Master Agreement provides for: (i) an immediate capital infusion from the Investor of $3.0 million at 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 the Investor having a current cash value of approximately $2.2 million; and (v) the implementation of a $50 million ELOC pursuant to which the Company may require the Investor to purchase common stock from time-to-time in the amounts and for the prices determined in accordance with the terms of the ELOC. Before the ELOC may be fully utilized, shares subject to the ELOC must be registered for resale and the Company must obtain consent from stockholders to issue shares in excess of 19.99% of the Company’s common stock as of the date of the ELOC. The Investor was also required to engage in good faith best efforts to prepay or otherwise acquire outstanding notes held by Esousa, given among other things the failure to achieve quorum at the special meeting called to approve the Esousa transaction and the restrictions on the issuance of additional shares until after such time as such stockholder approval is obtained. The full initial amounts due under the Master Agreement were not yet paid to the Company and Esousa’s notes remained outstanding, when the Company received claims from certain existing investors alleging that the Master Agreement violated the terms of their existing investments and Esousa enjoined us from issuing future securities, with certain exceptions, during the Restricted Period. The Company called a special stockholder meeting to approve the securities issuable upon conversion of the Esousa notes, which had been scheduled to take place on September 27, 2024. The proxy statement relating to such meeting requested approval of securities issuances in other capital raising transactions as well, which would have facilitated certain transactions under the Master Agreement. However, the Company was unable to achieve quorum and was forced to adjourn, and then ultimately cancel, the special meeting. The Company timely filed a registration statement, which it anticipates will be effective during the fourth quarter of 2024 and has filed a proxy statement for a second stockholder meeting to approve, among other things, the issuances of shares in connection with the Esousa and Liqueous transactions, which is scheduled to take place on December 27, 2024. The Company has negotiated financing transactions that would provide capital necessary to continue its path to commercialization; however, if the Company is unable to obtain the required stockholder approval to issue additional securities (and consent from certain investors with additional contractual rights to the extent required) or the counter parties do not perform under the terms of such financing agreements, the Company will not be able to sustain operations and will need to consider alternatives, which could include a sale, liquidation, or dissolution of the business or a foreclosure by its senior secured creditors.

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.”

Key Factors Affecting Our Performance

Commercial Launch of Products

In 2022 and early 2023, we began the production and shipment of our AO-650 laser. We announced the commercial launch of the first laser in the NUBURU BL TM series, the BL-250, in January 2023. We announced the commercial launch of the BL-1Kw in June 2023 and in the early second quarter of 2024, we expanded our BL product line to include the BL-300. We have shifted our future focus to manufacturing and shipping the BL series.

Adoption of our Blue Laser Technology

We believe that Nuburu blue laser technology offers a superior solution to improving a variety of aspects of welding and 3D printing, particularly in the manufacturing of batteries, consumer electronics, electric vehicles, renewable energy products and displays. However, our financial results will depend on the

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degree to which potential and current customers recognize the benefits of our blue laser technology and invest in our products. The selection process for our products is lengthy, typically up to 22-24 months, and may require us to incur costs in pursuing opportunities with no assurance that our products will be selected.

Capital Equipment

Our business is expected to depend substantially on capital expenditures by end users, particularly by manufacturers using our products for materials processing, which includes general manufacturing, automotive (particularly electric vehicles), other transportation, aerospace, heavy industry, consumer, semiconductor, and electronics. Although applications within materials processing are broad, the capital equipment market in general is cyclical and historically has experienced sudden and severe downturns. For the foreseeable future, our operations will continue to depend upon capital expenditures by end users of materials processing equipment and will be subject to the broader fluctuations of capital equipment spending.

Recent inflationary pressures are resulting in global central banks adopting less accommodating monetary policies and increasing interest rates. Higher interest rates could impact global growth and could lead to a recession that may reduce the investment in capital equipment. In addition, higher interest rates would increase the cost of equipment financed with leases or debt.

Establishing Manufacturing Capacity

Nuburu’s lasers are designed to be compatible with automated manufacturing methods. Nuburu continually improves the design of its lasers as well as the automation equipment required to manufacture these systems. We expect to work to reduce waste and limit costs while developing robust manufacturing processes with the aim of enhancing our competitive advantage in the marketplace. To do this, we are incorporating the Six Sigma Lean methodologies as well as ISO quality standards to ensure we meet customer expectations. With Six Sigma, we expect to further improve the quality of our products and decrease the variations that cause rework or defects. By incorporating the 5S pillars of the Six Sigma process into our day-to-day work life, we expect to develop a streamlined productive work environment ensuring organized and improved cycle times, with the aim of reducing the cost of goods sold. Through these tools we aim to create an environment that demands quality and performance, while reducing downtime and defects that are generated from undefined processes and underutilized talent.

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 third quarter of 2024. If we are able to obtain sufficient funding for operations, we anticipate that as we ramp up our manufacturing, we will require additional engineers and production personnel to build out and then operate our manufacturing capabilities.

Research and Development Expenses

We plan to continue to invest in research and development to improve our existing components and products and develop new components, products, systems and applications technology. We believe that these investments will sustain our position as a leader in the blue laser industry and will support the development of new products that can address new markets and growth opportunities. The amount of research and development expense we incur may vary from period to period.

Inflationary Pressure

The U.S. economy has experienced increased inflation recently, including as a result of expansive monetary policy. Our cost to manufacture our systems is heavily influenced by the cost of the key components and materials used in each system, cost of labor, as well as cost of equipment.

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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.

Operating Expenses

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 and laboratory supplies 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.

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 third quarter of 2024.

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 expenses. Selling and marketing expenses also include costs related to trade shows and marketing programs. 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.

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 third quarter of 2024.

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.

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 third quarter of 2024.

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, 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 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 Note 10 in the condensed consolidated financial statements included in Item 1 of this Quarterly Report for more information.

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Change in Fair Value of Derivative Liability

Change in fair value of derivative liability consists of 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 Note 10 in the condensed consolidated financial statements included in Item 1 of this Quarterly Report for more information.

Loss on Debt Extinguishment

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

Other Income (Expense), Net

Other income (expense), net consists primarily of a gain recorded related to a federal tax credit.

Results of Operations

Comparison of the three months ended September 30, 2024 and 2023

The following tables set forth our operations for the three months ended September 30, 2024 and 2023:

​ | ​ | Three Months Ended September 30, |  | ​ |  |
​ |  | 2024 |  |  | 2023 |  |  | $ Change |
Revenue | ​ | $ | — |  | ​ | $ | 186,743 |  | ​ | $ | (186,743 | )
Cost of revenue |  |  | 359,950 |  |  |  | 1,115,703 |  |  |  | (755,753 | )
Gross margin | ​ |  | (359,950 | ) | ​ |  | (928,960 | ) | ​ |  | 569,010 |
Operating expenses: | ​ | ​ |  | ​ | ​ |  | ​ |  |
Research and development | ​ |  | 206,474 |  | ​ |  | 1,348,450 |  | ​ |  | (1,141,976 | )
Selling and marketing |  |  | 113,445 |  |  |  | 523,627 |  |  |  | (410,182 | )
General and administrative | ​ |  | 1,941,085 |  | ​ |  | 2,335,605 |  | ​ |  | (394,520 | )
Total operating expenses | ​ |  | 2,261,004 |  | ​ |  | 4,207,682 |  | ​ |  | (1,946,678 | )
Loss from operations |  |  | (2,620,954 | ) |  |  | (5,136,642 | ) |  |  | 2,515,688 |
Interest income |  |  | 721 |  |  |  | 46,998 |  |  |  | (46,277 | )
Interest expense |  |  | (929,046 | ) |  |  | (162,765 | ) |  |  | (766,281 | )
Change in fair value of warrant liabilities |  |  | 369,674 |  |  |  | 167,108 |  |  |  | 202,566 |
Change in fair value of derivative liability |  |  | 141,100 |  |  |  | — |  |  |  | 141,100 |
Loss on extinguishment of debt |  |  | (1,339,017 | ) |  |  | — |  |  |  | (1,339,017 | )
Other income, net | ​ |  | — |  | ​ |  | — |  | ​ |  | — |
Loss before provision for income taxes |  | $ | (4,377,522 | ) |  | $ | (5,085,301 | ) |  | $ | 707,779 |
Provision for income taxes |  |  | — |  |  |  | — |  |  |  | — |
Net loss and comprehensive loss | ​ | $ | (4,377,522 | ) | ​ | $ | (5,085,301 | ) | ​ | $ | 707,779 |

Revenue. Revenue decreased $186,743 during the three months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily 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, particularly in the third quarter of 2024, as described above.

Cost of Revenue. Cost of revenue decreased $755,753 during the three months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily due to a period-over-period decrease of (i) direct labor of approximately $383,000 due to the cost reduction measures instituted by management in the third quarter of 2024, as further discussed above, and (ii) direct job costs and materials of approximately $326,000 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, particularly in the third quarter of 2024, as described above.

Research and Development. Research and development expenses decreased $1,141,976 during the three months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily due to (i) approximately $1,010,000 of lower personnel costs due to the cost reduction measures instituted by management in the third quarter of 2024, as further discussed above, (ii) approximately $117,000 of lower spend on the BL TM series as it transitioned to production in 2023 and (iii) approximately $115,000 lower software, consulting, and other costs.

Selling and Marketing. Selling and marketing expenses decreased $410,182 during the three months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily due to lower personnel costs due to the cost reduction measures instituted by management in the third quarter of 2024, as further discussed above, as well as lower consulting expenses.

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General and Administrative. General and administrative expenses decreased $394,520 during the three months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily driven by a decrease in compliance costs, which were heightened during the 2023 period due to the Business Combination, and a decrease in personnel costs due to the cost reduction measures instituted by management in the third quarter of 2024, as further discussed above, partially offset by an increase in professional service costs.

Interest Income. Interest income decreased $46,277 during the three months ended September 30, 2024 compared to the same period in 2023 due to lower cash balances between periods.

Interest Expense. Interest expense increased $766,281 during the three months ended September 30, 2024 compared to the same period in 2023 primarily due to higher debt balances between periods. Interest expense in the third quarter of 2024 was comprised of interest accrued on the Senior Convertible Notes and Junior Notes and the debt discount amortization for the Junior Notes. Refer to Note 8 in the condensed consolidated financial statements included in Note 1 of this Quarterly Report for more information on our debt obligations.

Change in Fair Value of Warrant Liabilities. We recorded a gain of $369,674 in the third quarter of 2024, which resulted from the decrease in the fair value of the Company's liability-classified warrants between June 30, 2024 and September 30, 2024. During the third quarter of 2023, we recorded a gain of $167,108 due to the decrease in the fair value of the Public Warrants between June 30, 2023 and September 30, 2023. As of December 31, 2023, the Public Warrants have a zero value due to being delisted from the NYSE American, as further discussed in Note 10 to the condensed consolidated financial statements included in Item 1 of this Quarterly Report.

Change in Fair Value of Derivative Liability. We recorded a gain of $141,100 in the third quarter of 2024, which resulted from the decrease in the fair value of the derivative liability from the time of the issuance of the August 2024 Convertible Notes in August 2024 through September 30, 2024. There was no derivative liability recorded during the third quarter of 2023.

Loss on Extinguishment of Debt. We recorded a loss on the extinguishment of debt of $1,339,017 for the three months ended September 30, 2024, which primarily relates to the issuance of 2,399,850 shares to noteholders of the Senior Notes and Junior Notes to extinguish an aggregate amount of $677,061 of principal and accrued interest under the Senior Notes and Junior Notes. For further information, see note 8 to the condensed consolidated financial statements.

Comparison of the nine months ended September 30, 2024 and 2023

The following tables set forth our operations for the nine months ended September 30, 2024 and 2023:

​ | ​ | Nine Months Ended September 30, |  | ​ |  |
​ |  | 2024 |  |  | 2023 |  |  | $ Change |
Revenue |  | $ | 142,827 |  |  | $ | 1,710,794 |  | ​ | $ | (1,567,967 | )
Cost of revenue |  |  | 1,950,632 |  |  |  | 4,813,404 |  |  |  | (2,862,772 | )
Gross margin | ​ |  | (1,807,805 | ) |  |  | (3,102,610 | ) | ​ |  | 1,294,805 |
Operating expenses: | ​ |  |  |  |  |  | ​ |  |
Research and development | ​ |  | 1,656,350 |  |  |  | 4,300,166 |  | ​ |  | (2,643,816 | )
Selling and marketing |  |  | 385,965 |  |  |  | 1,066,289 |  |  |  | (680,324 | )
General and administrative | ​ |  | 6,941,448 |  |  |  | 8,409,877 |  | ​ |  | (1,468,429 | )
Total operating expenses | ​ |  | 8,983,763 |  |  |  | 13,776,332 |  | ​ |  | (4,792,569 | )
Loss from operations |  |  | (10,791,568 | ) |  |  | (16,878,942 | ) |  |  | 6,087,374 |
Interest income |  |  | 17,202 |  |  |  | 91,914 |  |  |  | (74,712 | )
Interest expense |  |  | (2,821,527 | ) |  |  | (175,149 | ) |  |  | (2,646,378 | )
Change in fair value of warrant liabilities |  |  | 2,156,186 |  |  |  | 1,002,647 |  |  |  | 1,153,539 |
Change in fair value of derivative liability |  |  | 141,100 |  |  |  | — |  |  |  | 141,100 |
Loss on extinguishment of debt |  |  | (11,685,125 | ) |  |  | — |  |  |  | (11,685,125 | )
Other income, net | ​ |  | 218,169 |  |  |  | — |  | ​ |  | 218,169 |
Loss before provision for income taxes |  | $ | (22,765,563 | ) |  | $ | (15,959,530 | ) |  | $ | (6,806,033 | )
Provision for income taxes |  |  | — |  |  |  | — |  |  |  | — |
Net loss and comprehensive loss | ​ | $ | (22,765,563 | ) |  | $ | (15,959,530 | ) | ​ | $ | (6,806,033 | )

Revenue. Revenue decreased $1,567,967 during the nine months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily 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, particularly in the third quarter of 2024, as described above.

Cost of Revenue. Cost of revenue decreased $2,862,772 during the nine months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily due to a period-over-period decrease of approximately $3,018,000 of direct job costs and materials 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, particularly in the third quarter of 2024, as described above. This decrease was partially offset by increases of approximately $128,000 of other overhead costs period-over-period.

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Research and Development. Research and development expenses decreased $2,643,816 during the nine months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily due to (i) approximately $1,897,000 of lower personnel costs due to the cost reduction measures instituted by management in the first three quarters of 2024, as further discussed above, (ii) approximately $541,000 of lower spend on the BL TM series as it transitioned to production in 2023 and (iii) approximately $206,000 lower software, materials and consulting costs.

Selling and Marketing. Selling and marketing expenses decreased $680,324 during the nine months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily due to lower personnel costs related to the cost reduction measures instituted by management in the first three quarters of 2024, as further discussed above, and the reversal of stock compensation expense due to the departure of our Chief Marketing and Sales Officer in April 2024 and the resultant forfeiture of his unvested awards, and a decrease in consulting costs.

General and Administrative. General and administrative expenses decreased $1,468,429 during the nine months ended September 30, 2024 compared to the same period in 2023. This decrease is primarily driven by a decrease in compliance costs and professional fees, which were heightened during the 2023 period due to the Business Combination, and a decrease in personnel costs due to the cost reduction measures instituted by management in the third quarter of 2024, as further discussed above.

Interest Income. Interest income decreased $74,712 during the nine months ended September 30, 2024 compared to the same period in 2023 due to lower cash balances between periods.

Interest Expense. Interest expense increased $2,646,378 during the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to higher debt balances between periods. Interest expense in the first nine months of 2024 was comprised of interest accrued on the Senior Convertible Notes and Junior Notes and debt discount amortization for the Junior Notes. Interest expense for the nine three months of 2023 comprised of interest accrued on the Senior Convertible Notes, which were issued in June 2023. Refer to Note 8 in the condensed consolidated financial statements included in Note 1 of this Quarterly Report for more information on our debt obligations.

Change in Fair Value of Warrant Liabilities. We recorded a gain of $2,156,186 during the nine months ended September 30, 2024, which resulted from the decrease in the fair value of the Company's liability-classified warrants between December 31, 2023 and September 30, 2024. During the first nine months of 2023, we recorded a gain of $1,002,647 due to the decrease in the fair value of the Public Warrants between the Closing and September 30, 2023. As of December 31, 2023, the Public Warrants have a zero value due to being delisted from the NYSE American, as further discussed in Note 10 to the condensed consolidated financial statements included in Item 1 of this Quarterly Report.

Change in Fair Value of Derivative Liability. We recorded a gain of $141,100 during the nine months ended September 30,2 024, which resulted from the decrease in the fair value of the derivative liability from the time of the issuance of the August 2024 Convertible Notes in August 2024 through September 30, 2024. There was no derivative liability recorded during the nine months ended September 30, 2023.

Loss on Extinguishment of Debt. We recorded a loss on the extinguishment of debt of $11,685,125 for the nine months ended September 30, 2024. The majority of this loss is related to (i) the issuance of 2,248,312 shares to noteholders to extinguish $4.0 million of principal of Senior Notes and Junior Notes, as well as $106,050 of interest accrued on the Senior Notes and (ii) the issuance of 2,399,850 shares to noteholders of the Senior Notes and Junior Notes to extinguish an aggregate amount of $677,061 of principal and accrued interest under the Senior Notes and Junior Notes. For further information, see note 8 to the condensed consolidated financial statements.

Other Income (Expense), Net. Other income (expense), net consisted of a $218,169 gain related to an Employee Retention Tax Credit for qualifying 2021 wages received during the first nine months of 2024, which was accounted for when collectability was assured.

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 September 30, 2024, we had cash and cash equivalents of $232,075, as compared to $2,148,700 as of December 31, 2023. Our cash flows from operations are not sufficient to fund our current operating model and expansion plans. On the second anniversary of the Closing Date, the Company must also, under certain circumstances, redeem the maximum portion of the Preferred Stock as permitted by law in cash at an amount equal to the Original Issuance Price as of such date. 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.

From inception through September 30, 2024, we have incurred operating losses and negative cash flows from operating activities. For the nine months ended September 30, 2024 and 2023, we have incurred operating losses, including net losses of $22,765,563 and $15,959,530, respectively, and we have an accumulated deficit of $120,052,352 as of September 30, 2024. We anticipate that we will incur net losses for the foreseeable future and, even if we increase our revenue, there is no guarantee that it will ever become profitable. All of the aforementioned factors raise substantial doubt about our ability to continue as a going concern. If we are able to obtain sufficient funding, we expect to continue to expand our operations, including by investing in manufacturing, sales and marketing, research and development and infrastructure to support our growth.

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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 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.

​ | ​ | Nine Months Ended September 30, |
|  | 2024 |  |  | 2023 |
Net cash used in operating activities | ​ |  | (5,499,839 | ) | ​ |  | (13,259,181 | )
Net cash used in investing activities | ​ |  | — |  | ​ |  | (1,142,910 | )
Net cash provided by financing activities | ​ |  | 3,583,214 |  | ​ |  | 13,148,567 |

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, research and development, selling and marketing, and general and administrative activities to increase as a result of operating as a public company.

Net cash used in operating activities was $5,499,839 and $13,259,181 for the nine months ended September 30, 2024 and 2023, 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 decreases in revenue.

Cash flows from investing activities

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

Net cash used in investing activities was nil and $1,142,910 for the nine months ended September 30, 2024 and 2023, respectively. The cash used in investing activities for the nine months ended September 30, 2023 primarily related to the purchase of equipment to build out our production line.

Cash flows from financing activities

We have financed our operations primarily through the sale of stock and promissory notes.

Net cash provided by financing activities was $3,583,214 and $13,148,567 for the nine months ended September 30, 2024 and 2023, respectively. Net cash provided by financing in activities in the nine months ended September 30, 2024 is comprised primarily of proceeds from the issuance of pre-funded warrants and Common Stock of $2,139,866 and $200,000, respectively, as well as proceeds from debt borrowings of $743,000 and proceeds from shareholder advances of $645,036, partially offset by payments of accrued debt issuance costs for the Junior Notes totaling $71,500 and tax withholdings for RSU issuances totaling $73,088.

Net cash provided by financing in activities in the nine months ended September 30, 2023 is comprised of proceeds received from the issuance of convertible promissory notes and warrants, proceeds from the issuance of Common Stock from the Lincoln Park Purchase Agreement, and the proceeds received from the Closing of the Business Combination. These combined proceeds were partially offset by payments of transaction costs associated with the Business Combination.

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.

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The following tables present our key performance indicators for the three and nine months ended September 30, 2024 and 2023.

​ | ​ | Three Months Ended September 30, |  | ​ |  |
​ |  | 2024 |  |  | 2023 |  |  | $ Change |
Revenue | ​ | $ | — |  | ​ | $ | 186,743 |  | ​ | $ | (186,743 | )
Total gross margin |  |  | (359,950 | ) |  |  | (928,960 | ) |  |  | 569,010 |
EBITDA(1) | ​ |  | (3,242,479 | ) | ​ |  | (4,824,579 | ) | ​ |  | 1,582,100 |
Capital expenditures |  |  | — |  |  |  | (317,038 | ) |  |  | 317,038 |
Free cash flow(1) | ​ |  | (1,177,612 | ) | ​ |  | (4,876,411 | ) | ​ |  | 3,698,799 |

​ | ​ | Nine Months Ended September 30, |  | ​ |  |
​ |  | 2024 |  |  | 2023 |  |  | $ Change |
Revenue | ​ | $ | 142,827 |  | ​ | $ | 1,710,794 |  | ​ | $ | (1,567,967 | )
Total gross margin |  |  | (1,807,805 | ) |  |  | (3,102,610 | ) |  |  | 1,294,805 |
EBITDA(1) | ​ |  | (19,364,982 | ) | ​ |  | (15,506,324 | ) | ​ |  | (3,858,658 | )
Capital expenditures |  |  | — |  |  |  | (1,142,910 | ) |  |  | 1,142,910 |
Free cash flow(1) | ​ |  | (5,499,839 | ) | ​ |  | (14,402,091 | ) | ​ |  | 8,902,252 |

(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, which are net loss and net cash used in operating activities, respectively.

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.

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, including the following:

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

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Reconciliation

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

​ | ​ | Three Months Ended September 30, |  | ​ | Nine Months Ended September 30, |
​ |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net loss | ​ | $ | (4,377,522 | ) | ​ | $ | (5,085,301 | ) | ​ | $ | (22,765,563 | ) | ​ | $ | (15,959,530 | )
Interest (income) expense, net |  |  | 928,325 |  |  |  | 115,767 |  |  |  | 2,804,325 |  |  |  | 83,235 |
Income tax expense | ​ |  | — |  | ​ |  | — |  | ​ |  | — |  | ​ |  | — |
Depreciation and amortization |  |  | 206,718 |  |  |  | 144,955 |  |  |  | 596,256 |  |  |  | 369,971 |
EBITDA | ​ | $ | (3,242,479 | ) | ​ | $ | (4,824,579 | ) | ​ | $ | (19,364,982 | ) | ​ | $ | (15,506,324 | )

The following tables reconcile 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 September 30, |
​ |  | 2024 |  |  | 2023 |
Net cash used in operating activities | ​ | $ | (1,177,612 | ) | ​ | $ | (4,559,373 | )
Capital expenditures |  |  | - |  |  |  | (317,038 | )
Free cash flow | ​ | $ | (1,177,612 | ) | ​ | $ | (4,876,411 | )

​ | ​ | Nine Months Ended September 30, |
​ |  | 2024 |  |  | 2023 |
Net cash used in operating activities | ​ | $ | (5,499,839 | ) | ​ | $ | (13,259,181 | )
Capital expenditures |  |  | — |  |  |  | (1,142,910 | )
Free cash flow | ​ | $ | (5,499,839 | ) | ​ | $ | (14,402,091 | )

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2024. 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.

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 estimates during the nine months ended September 30, 2024, as compared to the critical accounting estimates described in our audited financial statements included in the Form 10-K filed with the SEC on April 15, 2024, and as subsequently amended by the Form 10-K/As filed with the SEC on April 29, 2024, August 12, 2024 and September 6, 2024.

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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 Qualitati ve 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 a nd 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 principal executive officer and principal financial officer, 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 September 30, 2024, 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 restatements of the Company’s financial statements as of and for the year ended December 31, 2023, the comparative period therein as of and for the year ended December 31, 2022 and for each of the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023 (as filed on Amendment No. 4 on Form 10-K/A on November 8, 2024), March 31, 2024 (as filed on Amendment No. 1 on Form 10-Q/A on November 14, 2024) and June 30, 2024 (as filed on Amendment No. 1 on Form 10-Q/A on November 14, 2024). Additionally, this material weakness could result in material misstatements of the financial statements that would not be prevented or detected on a timely basis.

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.

See Note 15, “Restatement of Previously Issued Consolidated Financial Statements and Previously Issued Unaudited Interim Condensed Consolidated Financial Statements ” for additional information.

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 was no change in our internal control over financial reporting that occurred during the most recent fiscal quarter of 2024 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER IN FORMATION

Item 1. Legal Pr oceedings.

The information under the caption “Notes to Condensed Consolidated Financial Statements – Note 6 – Commitments and Contingencies” 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 September 30, 2024 and December 31, 2023, the Company was not involved in any material legal proceedings.

Subsequent to the quarter ended September 30, 2024, despite the Company calling a meeting of stockholders to approve the Esousa transaction (which failed for lack of achieving quorum) and expending significant efforts to satisfy required conditions, Esousa filed a complaint in the U.S. District Court for the Southern District of New York and enjoined the Company from issuing additional securities until such stockholder approval and other requirements are satisfied, significantly impacting the Company’s ability to raise capital critical to operations. Esousa subsequently settled its claims for a payment of $50,000 and a future payment of $100,000 upon the consummation of the very transactions it sought to enjoin in its complaint.

Item 1A. Risk F actors.

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 Amended 10-K, in evaluating our results of operations, financial condition, business and operations or an investment in the shares of our company. Other than the risk factor set forth below, there have been no material changes from the risk factors disclosed in our Amended 10-K. If any of the risks discussed in our Amended 10-K are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected.

We have had to restate previously issued consolidated financial statements and, as part of that process, we identified material weaknesses in our internal control over financial reporting. If we are unable to develop and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and may adversely affect our business, financial condition and results of operations.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Effective internal control over financial reporting is necessary for us to provide reliable financial reporting and prevent fraud.

On October 21, 2024, our Board of Directors and management, upon the recommendation of the Audit Committee of our Board of Directors, concluded that our previously issued financial statements as of and for the year ended December 31, 2023, the comparative period therein as of and for the year ended December 31, 2022 and unaudited condensed consolidated financial statements as of and for each of the interim quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, and June 30, 2024 should no longer be relied upon due to material weaknesses in our control environment related to the accounting and presentation of complex financial instrument transactions, as further described in Note 15, Restatement of Previously Issued Consolidated Financial Statements and Previously Issued Unaudited Interim Condensed Consolidated Financial Statements, in Part I, Item 1 of this Quarterly Report.

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. These remediation measures may be time-consuming and costly, and there is no assurance that these initiatives will ultimately have the intended effects. Any failure to maintain effective internal control over financial reporting could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our financial statements are not accurate or are not filed on a timely basis, we could be subject to regulatory scrutiny, investigations or enforcement actions, which could have an adverse effect on our business, financial condition and results of operations. Ineffective internal control over financial reporting could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

We can provide no assurance that the measures that we plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or a circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements.

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

Descriptions of the April 2024 SPA Agreement, Warrant Issuances, Note Extinguishments and August 2024 Convertible Notes described above under "Recent Developments", 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.

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Item 3. Defaults Upo n Senior Securities.

N ot applicable.

Item 4. Mine Safe ty Disclosures.

Not applicable.

Item 5. Other Inf ormation.

No t applicable.

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Item 6. Exhi bits

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

|  |  | Incorporated by Reference
No. |  | Description of Exhibit | Form | File No. | Exhibit No. | Filing Date
2.1† |  | Business Combination Agreement, dated as of August 5, 2022, by and among Tailwind Acquisition Corp., Compass Merger Sub, Inc. and Nuburu, Inc. | 8-K | 001-39489 | 2.1 | August 8, 2022
3.1 |  | Amended and Restated Certificate of Incorporation of the Company. | 8-K | 001-39489 | 3.1 | February 6, 2023
3.2 |  | Certificate of Amendment to Certificate of Incorporation of the Company. | 8-K | 001-39489 | 3.1 | June 24, 2024
3.3 |  | Amended and Restated Bylaws of the Company. | 8-K | 001-39489 | 3.2 | September 9, 2020
3.4 |  | Certificate of Designations of the Company. | 8-K | 001-39489 | 3.3 | February 6, 2023
10.1 |  | Securities Purchase Agreement, dated August 6, 2024, by and between Nuburu, Inc. and Esousa Group Holdings LLC | 8-K | 001-39489 | 10.1 | August 12, 2024
10.2 |  | Exchange Agreement, dated August 6, 2024, by and between Nuburu, Inc. and Esousa Group Holdings LLC | 8-K | 001-39489 | 10.2 | August 12, 2024
10.3 |  | Securities Purchase Agreement, dated August 19, 2024, by and between Nuburu, Inc. and Esousa Group Holdings LC | 8-K | 001-39489 | 10.1 | August 23, 2024
10.4 |  | Exchange Agreement, dated August 19, 2024, by and between Nuburu, Inc. and Esousa Group Holdings LLC | 8-K | 001-39489 | 10.2 | August 23, 2024
10.5* |  | Master Transaction Summary agreement, dated October 1, 2024, between Nuburu, Inc. and Liqueous LP |  |  |  |
10.6* |  | Common Stock Purchase Agreement, dated October 1, 2024, between Nuburu, Inc. and Liqueous LP |  |  |  |
10.7* |  | Securities Purchase Agreement, dated October 1, 2024, between Nuburu, Inc. and Liqueous LP |  |  |  |
10.8* |  | Securities Purchase Agreement, dated October 1, 2024, between Nuburu, Inc. and Liqueous LP |  |  |  |
10.9* |  | Registration Rights Agreement, dated October 1, 2024, between Nuburu, Inc. and Liqueous LP |  |  |  |
31.1* |  | 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 |  |  |  |
31.2* |  | 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 |  |  |  |
32.1** |  | 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 |  |  |  |
32.2** |  | 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 |  |  |  |
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.​

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​SIGNA TURES

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

Date: November 14, 2024 | Nuburu, Inc.
| By: | /s/ Ron Nicol
| Name: | Ron Nicol
| Title: | Executive Chairman
|  | (Principal Executive Officer)
| By: | /s/ Brian Knaley
| Name: | Brian Knaley
| Title: | Chief Executive Officer
|  | (Principal Financial and Accounting Officer)

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