10-Q

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

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 March 31, 2023


☐	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
Redeemable warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50	BURU WS	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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 5, 2023, the registrant had 34,896,251 shares of common stock, $0.0001 par value per share, outstanding.

NUBURU, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page
PART 1 – INTERIM FINANCIAL INFORMATION

	Special note regarding forward-looking statements	3

Item 1.	Unaudited Condensed Consolidated Financial Statements	5

	Condensed Consolidated Balance Sheets	5

	Condensed Consolidated Statements of Operations and Comprehensive Loss	6

	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	7

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29

Item 4.	Controls and Procedures	29

PART II – OTHER INFORMATION		30

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

SIGNATURES		32

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q 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 on Form 10-Q 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”) or the 16,710,785 whole warrants of the Company sold to public investors in the IPO as part of the units (the “Public Warrants”) on a securities exchange;

•

the anticipated benefits of the Business Combination;

•

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

•

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;

•

obtaining additional financing under that certain Purchase Agreement by and among the Company, Nuburu and Lincoln Park Capital Fund, LLC (“Lincoln Park”), dated as of August 5, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the “Lincoln Park Purchase Agreement”) or pursuant to the Preferred Stock Sale Option Agreement between the Company and each of Anzu Nuburu LLC, Anzu Nuburu II LLC, Anzu Nuburu III LLC and Anzu Nuburu V LLC (the “Anzu SPVs”), dated as of August 5, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the “Sale Option Agreement”);

•

the impact of the COVID-19 pandemic, including any mutations or variants thereof, and its effect on business and financial conditions;

•

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. You should understand that the following important factors, in addition to those discussed under the heading “Risk Factors” in Part II, Item 1A of this quarterly report on Form 10-Q and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022 (our “Annual Report”), could affect our future results, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements herein:

•

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

•

our ability to meet NYSE American’s continued listing standards;

•

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;

•

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;

•

our inability to obtain financing under the Lincoln Park Purchase Agreement or pursuant to the Sale Option Agreement;

•

the impact of the COVID-19 pandemic, including any mutations or variants thereof, and its effect on business and financial conditions;

•

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 on Form 10-Q and our Annual Report.

The forward-looking statements contained in this quarterly report on Form 10-Q 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 described under the heading “Risk Factors” in Part II, Item 1A. 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. Financial Statements and accompanying footnotes, or the context otherwise requires, references in this quarterly report on Form 10-Q to:

“Business Combination” are to the business combination of Legacy Nuburu with a subsidiary of Tailwind, 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 and Merger Sub, 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;

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

“Exchange Ratio” are to the quotient as defined in, and calculated in accordance with, the Business Combination Agreement, which is reflected in 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;

“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 Legacy Nuburu and its subsidiaries prior to the Closing, and Nuburu, Inc., a Delaware corporation, and its subsidiaries after the Closing.

PART 1 – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

NUBURU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,523,046		$	2,880,254
Accounts receivable, net		522,764			327,200
Inventories, net of allowance of $411,148 and $292,990, respectively		1,248,794			972,695
Deferred financing costs		—			4,258,515
Prepaid expenses and other current assets		978,136			46,737
Total current assets		4,272,740			8,485,401
Property and equipment, net		4,012,568			3,771,849
Construction in progress		130,412			188,912
Right-of-use assets		565,662			641,651
Other assets		34,359			34,359
TOTAL ASSETS	$	9,015,741		$	13,122,172

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	4,256,822		$	4,456,587
Accrued expenses		2,281,559			2,312,118
Operating lease liability		350,606			343,049
Contract liabilities		173,750			178,750
Convertible notes payable		—			7,300,000
Total current liabilities		7,062,737			14,590,504
Operating lease liability, net of current portion		282,345			373,907
Warrant liabilities		835,539			—
TOTAL LIABILITIES		8,180,621			14,964,411
Commitments and Contingencies (Note 6)
Stockholders’ Equity (Deficit)
Convertible preferred stock, $0.0001 par value; 50,000,000 shares authorized; 3,038,905 and 23,237,703 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		304			4,040
Common stock, $0.0001 par value; 250,000,000 shares authorized; 33,585,544 and 5,556,857 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		3,359			1,077
Additional paid-in capital		66,791,282			59,344,952
Accumulated deficit		(65,959,825	)		(61,192,308	)
Total Stockholders’ Equity (Deficit)		835,120			(1,842,239	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	9,015,741		$	13,122,172

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

NUBURU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)


	Three Months Ended March 31,
	2023			2022
Sales, net	$	469,989		$	90,000
Cost of sales		1,212,437			555,052
Gross margin		(742,448	)		(465,052	)
Operating expenses:
Research and development		1,332,305			631,501
Selling and marketing		176,256			348,780
General and administrative		3,050,259			843,043
Total operating expenses		4,558,820			1,823,324
Loss from operations		(5,301,268	)		(2,288,376	)
Interest income		32,427			582
Other income, net		501,324			—
Loss before provision for income taxes	$	(4,767,517	)	$	(2,287,794	)
Provision for income taxes		—			—
Net loss and comprehensive loss	$	(4,767,517	)	$	(2,287,794	)
Net loss per share, basic and diluted	$	(0.19	)	$	(0.44	)
Weighted-average common shares used to compute net loss per share attributable to common stockholders, basic and diluted		25,515,164			5,209,325

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

NUBURU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)


	Convertible Preferred Stock						Common Stock
	Shares(1)			Amount			Shares(1)		Amount			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Equity (Deficit)
Balance as of December 31, 2022		23,237,703		$	4,040			5,556,857	$	1,077		$	59,344,952		$	(61,192,308	)	$	(1,842,239	)
Issuance of Common Stock and Series A preferred stock upon conversion of convertible notes in connection with the reverse recapitalization		1,361,787			136			1,361,787		136			11,575,014			—			11,575,286
Conversion of Legacy Nuburu convertible preferred stock into Common Stock in connection with the reverse recapitalization		(23,237,703	)		(4,040	)		23,237,703		2,323			1,717			—			—
Issuance of Common Stock and Series A preferred stock upon the reverse recapitalization, net of issuance costs		1,481,666			148			3,233,745		(197	)		(3,257,476	)		—			(3,257,525	)
Issuance of Common Stock and Series A preferred stock to satisfy certain reverse recapitalization costs		195,452			20			195,452		20			(40	)		—			—
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		$	304			33,585,544	$	3,359		$	66,791,282		$	(65,959,825	)	$	835,120


	Convertible Preferred Stock				Common Stock
	Shares(1)		Amount		Shares(1)		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders' Equity (Deficit)
Balance as of December 31, 2021		23,196,296	$	4,036		5,153,286	$	999	$	56,646,247	$	(47,063,207	)	$	9,588,075
Issuance of Legacy Nuburu Series C preferred stock		41,407		4		—		—		188,886		—			188,890
Issuance of Legacy Nuburu common stock from option exercises		—		—		370,395		72		107,788		—			107,860
Stock-based compensation		—		—		—		—		69,455		—			69,455
Net loss		—		—		—		—		—		(2,287,794	)		(2,287,794	)
Balance as of March 31, 2022		23,237,703	$	4,040		5,523,681	$	1,071	$	57,012,376	$	(49,351,001	)	$	7,666,486

(1) 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.

NUBURU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Three Months Ended March 31,
	2023			2022
Cash Flows from Operating Activities:
Net loss	$	(4,767,517	)	$	(2,287,794	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		126,115			135,153
Stock-based compensation		463,978			69,455
Change in fair value of warrant liabilities		(501,324	)		—
Excess and obsolete inventory reserve adjustments		—			51,034
Inventory lower of cost and net realizable value adjustments		118,158			—
Changes in operating assets and liabilities:
Accounts receivable		(195,564	)		135,500
Inventories		(357,790	)		(163,683	)
Prepaid expenses and other current assets		(891,399	)		32,567
Operating lease right-of-use asset		75,989			71,624
Accounts payable		1,803,093			308,118
Accrued expenses		164,693			(178,272	)
Contract liabilities		(5,000	)		—
Operating lease liability		(84,005	)		(76,919	)
Net cash used in operating activities		(4,050,573	)		(1,903,217	)
Cash Flows from Investing Activities:
Purchase of property and equipment		(344,801	)		(102,381	)
Net cash used in investing activities		(344,801	)		(102,381	)
Cash Flows from Financing Activities:
Proceeds from issuance of Legacy Nuburu convertible promissory notes		4,100,000			100,000
Proceeds from the exercise of stock options		—			107,860
Proceeds from the issuance of Legacy Nuburu preferred stock		—			188,890
Proceeds from reverse recapitalization		3,243,079			—
Proceeds from the issuance of preferred stock		5,000			—
Payment of transaction costs related to the reverse recapitalization		(3,634,913	)		—
Repayment of related party convertible promissory notes		(675,000	)		—
Net cash provided by financing activities		3,038,166			396,750
NET CHANGE IN CASH DURING THE PERIOD		(1,357,208	)		(1,608,848	)
CASH AND CASH EQUIVALENTS ―BEGINNING OF PERIOD		2,880,254			6,007,575
CASH AND CASH EQUIVALENTS ―END OF PERIOD	$	1,523,046		$	4,398,727
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	—		$	—
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—		$	934,583
Deferred financing costs included in accounts payable and accrued expenses	$	384,522		$	564,810
Transaction costs related to the reverse recapitalization not yet paid	$	2,107,439		$	—
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.

NUBURU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.

From inception through March 31, 2023, the Company has incurred operating losses and negative cash flows from operating activities. For the three months ended March 31, 2023 and 2022, the Company has incurred operating losses, including net losses of $4,767,517 and $2,287,794, respectively. The Company has an accumulated deficit of $65,959,825 as of March 31, 2023, which factors raise substantial doubt about the Company's ability to continue as a going concern. The Company expects to continue to expand our operations, including by investing in manufacturing, sales and marketing, research and development and infrastructure to support our growth. The Company anticipates that we will incur net losses for the foreseeable future and, even if we increase our revenues, there is no guarantee that we will ever become profitable.

Until we can generate sufficient revenue to cover our operating expenses, working capital, and capital expenditures, we will rely on funds raised from the closing of the Business Combination, from the $11,400,000 of Company Notes issued prior to the Closing, from the Lincoln Park Purchase Agreement pursuant to which Lincoln Park has agreed to purchase from the Company, at the sole discretion of the Company, up to $100,000,000 of Common Stock from time to time over a 48-month period, and from causing the Anzu SPVs to use up to 2/3 of the gross proceeds of Permitted Transfers to purchase Preferred Stock from the Company at a price equal to $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) pursuant to the Sale Option Agreement. In accordance with the Lincoln Park Purchase Agreement, Lincoln Park has purchased, at the option of the Company, approximately $2,100,000 of Common Stock subsequent to March 31, 2023.

The Company plans to finance its operations with proceeds from the 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.

Certain 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. The Company is subject to the risks associated with such activities, including the need to further develop its technology, 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.

As of the date of issuance of the financial statements, the Company’s operations have not been significantly impacted by the COVID-19 pandemic, however, the Company continues to monitor the situation. While the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.

The impact of the Russian invasion of Ukraine and the related sanctions imposed by the United States and other countries on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

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.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 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 March 31, 2023 and the audited financial statements of Legacy Nuburu for the years ended December 31, 2022 and 2021 included in the Amendment No. 1 to the Form 8-K filed with the SEC on March 31, 2023.

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.

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 which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in the notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 31, 2023 and the audited financial statements of Legacy Nuburu for the years ended December 31, 2022 and 2021 included in the Amendment No. 1 to the Form 8-K filed with the SEC on March 31, 2023. The significant accounting policies have not changed significantly since those filings.

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 $10.00 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		0.515
Legacy Nuburu Series A Preferred Stock		0.566
Legacy Nuburu Series A-1 Preferred Stock		0.599
Legacy Nuburu Series B Preferred Stock		0.831
Legacy Nuburu Series B-1 Preferred Stock		0.515
Legacy Nuburu Series C Preferred Stock		1.146

This resulted in 31,323,904 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 3,675,976 shares of Nuburu Common Stock at a deemed value of $10.00 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 23,237,703 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 5,556,857 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 1,167,557 shares of Nuburu Common Stock at the Effective Time;

•

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, 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 1,361,787 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 3,133,270 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 542,706 Nuburu RSUs for shares of Nuburu Common Stock with the same terms and vesting conditions except for the number of shares, which was adjusted 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 1,150,000 shares of Common Stock (of which, 150,000 shares were transferred to Nautilus Maser Fund, L.P. and 50,000 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 200,000 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:


	Common Shares			Series A Preferred Shares
Tailwind public shares		316,188			—
Tailwind Sponsor Class B shares		8,355,393			—
Total shares of Tailwind common stock outstanding immediately prior to the Business Combination		8,671,581			—
Less: forfeiture of the Tailwind Sponsor Class B Common Stock other than 1,150,000 shares of Common Stock and 650,000 shares of Series A Preferred Stock		(7,205,393	)		—
Tailwind Sponsor Series A Preferred Stock		—			650,000
Tailwind public shares issuance of Series A Preferred Stock		—			316,188
Legacy Nuburu shares		31,323,904			1,377,265
Lincoln Park Commitment Shares		200,000			—
Anzu Warrant Shares		—			500,000
Total shares of Nuburu Common Stock outstanding immediately after the Business Combination(1)(2)		32,990,092			2,843,453

(1) Excludes 3,675,976 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 16,710,785 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

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