Aeluma, Inc.
For the period ended Sep 30, 2026. Filed Nov 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 12, 2026
ALMU$7.58+5.1%Stored close · as of Nov 12, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001213900-26-055956
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-12.
0001213900-26-119031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 54 previous paragraphs and 33 current paragraphs.
9 unchanged; 11 reworded; 13 added; 33 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
This report contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,” “perceive,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “views,” “will,” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those discussed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, and in this Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current report
Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Current report
Aeluma, Inc. (together with our subsidiary, “we,” “our,” “us,” or the “Company”) develops high-performance photonic and electronic technologies for communications and sensing in telecom, artificial intelligence (“AI”) datacom, mobile, defense and aerospace, robotics, automotive, augmented reality/virtual reality (“AR/VR”), and quantum applications. Our proprietary platform combines compound semiconductor materials with large-diameter substrates to leverage manufacturing infrastructure used in high-volume microelectronics. Our technology and product development activities have focused on photodetectors, photodetector arrays, lasers, optical amplifiers, and other technologies. Our photodetectors and photodetector arrays can detect near-infrared (“NIR”) and shortwave infrared (“SWIR”) light. Our lasers and optical amplifiers are primarily based on quantum dot technology. Aeluma’s platform may also be applied to other photonic and electronic devices, including transistors and solar cells.
Current report
Our headquarters are in Goleta, California. Our principal research and development (“R&D”) and manufacturing facility is approximately 9,000 square feet and includes a cleanroom and equipment used for epitaxy wafer production, process development, prototyping, wafer-scale testing, and validation. During fiscal year 2026, we expanded our internal test and prototyping capabilities through the acquisition of automated and semi-automated wafer probers, packaging and prototyping equipment, test and validation instruments, and related facility infrastructure. We have extended the lease for our principal facility through March 2031 to support anticipated growth, and we also lease approximately 2,400 square feet of additional office space near our headquarters. We may require additional space in the future to support continued growth.
Current report
We leverage a capital-efficient manufacturing model that combines internal materials production, process-development, prototyping, and test capabilities with external fabrication, packaging, and integration. We have relationships with production-scale foundries and other supply-chain partners, including relationships announced during fiscal year 2026 with Tower Semiconductor and Sumitomo Chemical Advanced Technologies for wafer production and fabrication. We expect these external capabilities to be important to our ability to qualify manufacturing processes and increase production capacity if substantial customer demand develops.
Current report
We are transitioning from a predominantly R&D-stage business toward commercialization. Our revenue currently consists of government development contracts, with emerging commercial development and product revenue. We have delivered wafers, chips, and engineering samples, performed non-recurring engineering projects, and have begun accepting initial commercial sales orders. These initial commercial orders have been relatively small, and commercial customers generally require extensive evaluation and qualification before committing to production volumes.
Current report
Our operating priorities are to advance product development, complete customer and manufacturing qualifications, deliver on existing commercial and government contracts, increase manufacturing readiness, and convert qualified customer engagements into recurring product revenue. We expect to continue investing in engineering, materials growth, wafer fabrication, packaging, testing, quality systems, sales, and business development.
Current report
We intend to continue supplying engineering samples, prototype wafers and chips, small volume products, and development services while customers evaluate our technology. We plan to work directly with prospective customers and with system integrators, module manufacturers, Tier-1 suppliers, component suppliers, semiconductor companies, and government prime contractors. We also intend to continue working with external foundries, packaging providers, and integration partners to establish repeatable, qualified production flows that can support large volumes.
Current report
The timing and scale of commercialization will depend on several factors, including technical performance, reliability testing, customer qualification, product design decisions, supply chain readiness, and market demand. We may continue to derive a substantial portion of our revenue from government and customer development programs while commercial products progress through qualification.
Current report
Revenue: Revenue decreased $0.8 million to $0.6 million for the three months ended September 30, 2026, compared to $1.4 million for the same period in 2025. The decrease was primarily attributable to the completion of the first phase of one large government contract, partially offset by revenue generated from four new government contracts.
Current report
Other income (expense): Other income, consisting entirely of interest income, totaled $0.5 million for the three months ended September 30, 2026, compared to $0.1 million for the same period in 2025.
Current report
On July 29, 2026, we entered into a letter of intent with the U.S. Department of Commerce for up to $30 million in proposed funding under the CHIPS and Science Act. The proposed funding is intended to support R&D of our semiconductor manufacturing platform. The contemplated award remains subject to further due diligence, required governmental approvals, and the execution of definitive award documents. If finalized and received, the funding could serve as a potential source of capital to support our R&D activities and strengthen our liquidity position; however, until the applicable conditions are satisfied and definitive agreements are executed, the funding is not a committed source of liquidity.
Current report
The accompanying discussion and analysis of our financial condition and results of operations is based upon our audited condensed consolidated financial statements, which have been prepared in accordance with GAAP. We believe certain of our accounting policies are critical to understanding our financial position and results of operations. Our significant accounting policies and estimates are discussed in Note 1 to the Condensed Consolidated Financial Statements “The Company and Basis of Presentation.”
Removed paragraphs (33)
Previous report
This report contains forward-looking statements and information that are based on the beliefs of our management as well as assumptions made by and information currently available to us. Such statements should not be unduly relied upon. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions. Forward-looking statements and information can generally be identified by the use of forward-looking terminology or words, such as “anticipate,” “approximately,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,” “perceive,” “plan,” “potential,” “predict,” “project,” “seeks,” “should,” “views” or similar words or phrases or variations thereon, or the negatives of those words or phrases, or statements that events, conditions or results “can,” “will,” “may,” “must,” “would,” “could” or “should” occur or be achieved and similar expressions in connection with any discussion, expectation or projection of future operating or financial performance, costs, regulations, events or trends. The absence of these words does not necessarily mean that a statement is not forward-looking.
Previous report
Forward-looking statements and information are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. These statements reflect our current view concerning future events and are subject to risks, uncertainties, and assumptions. There are important factors that could cause actual results to vary materially from those described in this report as anticipated, estimated or expected, as well as general conditions in the economy, capital markets, the SEC regulations which affect trading in the securities of “penny stocks,” and other risks and uncertainties. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. Depending on the market for our stock and other conditional tests, a specific safe harbor under the Private Securities Litigation Reform Act of 1995 may be available. Notwithstanding the above, 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”), expressly state that the safe harbor for forward-looking statements does not apply to companies that issue penny stock. Because we may from time to time be considered to be an issuer of penny stock, the safe harbor for forward-looking statements may not apply to us at certain times.
Previous report
Unless otherwise stated or the context otherwise indicates, references to “Aeluma,” the “Company,” “we,” “our,” “us,” or similar terms refer to Aeluma, Inc. and Subsidiary.
Previous report
Aeluma develops novel optoelectronic and electronic devices for sensing, communication, and computing applications. Aeluma has pioneered a technique to produce semiconductor materials and chips using high-performance compound semiconductors on large-diameter substrates that are commonly used to manufacture mass-market microelectronics. This enables cost-effective manufacturing of high-performance photodetectors and photodetector arrays for imaging applications in mobile devices, as well as other applications. Aeluma’s technology has the potential to impact a broad range of market verticals. We operate in a 9,000 sq. ft. facility with a state-of-the-art R&D/manufacturing cleanroom and access to world-class rapid prototyping capabilities. The facility houses unique equipment for scalable manufacturing. Aeluma also partners with production-scale fabrication foundries and packaging companies. Aeluma maintains extensive patent protection and trade secrets that relate to its materials, manufacturing technology, and applications. On September 5, 2025, we commenced a new five-year lease for an office adjacent to our existing facility to accommodate anticipated headcount growth and support future expansion. Since the fiscal year ended June 30, 2025, we have made progress on our expansion initiatives, including selectively increasing headcount to support operational and strategic objectives. Headcount increased compared to the fourth quarter of 2025 with the addition of eight qualified and experienced personnel.
Previous report
Aeluma is a transformative semiconductor company specializing in high-performance technology that scales. Applications include mobile, automotive, AI, defense & aerospace, communication, AR/VR, high-performance computing, and quantum computing. Aeluma aims to break out of traditional manufacturing to expand the reach of its technology into mass markets. The demand for higher-performance semiconductors in consumer markets is increasing (https://www.marketsandmarkets.com/Market-Reports/shortwave-ir-market-52975079.html). Aeluma’s disruptive technology is scalable, cost-effective, while not sacrificing performance.
Previous report
Additionally, Aeluma’s technology may be used to manufacture other electronic and optoelectronic devices including lasers, transistors, and solar cells.
Previous report
Recent Government Contracts
Previous report
During the three and nine months ended March 31, 2026, we entered into four and five new material government contracts, respectively, that include NASA, the State University of New York, and the Office of the Secretary of Defense. We also continue to perform under existing contracts, including contracts with the U.S. Navy, the U.S. Department of Energy, and U.S. Defense Advanced Research Projects Agency, which remain significant sources of revenue.
Previous report
Public Offerings of Common Stock
Previous report
We completed two underwritten public offerings of our common stock, raising net proceeds of $12.6 million in March 2025 and $23.4 million in September 2025. As of March 31, 2026, the proceeds from these offerings continue to support our working capital, operations, and planned business development activities.
Previous report
On March 20, 2026, we entered into a sales agreement, pursuant to which we may sell shares of our common stock having an aggregate offering price of up to $50 million, through an “at-the-market” offering program. As of March 31, 2026, no sales of our common stock were transacted under this agreement. We are not obligated to sell, and the agents are not obligated to buy or sell, any shares under the agreement. Any shares will be offered and sold under the agreement will be pursuant to the Company’s effective shelf registration statement on Form S-3.
Previous report
Management continues to monitor capital market conditions and may consider other future financing if needed.
Previous report
Our technology is based on heterogeneous integration of compound semiconductor materials on large-diameter substrates such as silicon. This heterogeneous integration enables the subsequent device fabrication and manufacturing in large-scale manufacturing environments that are suited to mass markets.
Previous report
We will continue to develop our technology that includes novel materials and devices based on our core intellectual property. Our primary focus is to manufacture high-performance semiconductor technologies that scale for mass markets. Aeluma operates R&D and manufacturing facilities at its headquarters in Goleta, California, and has developed relationships with volume fabrication foundries and packaging partners. We will continue to mature our manufacturing processes to further our commercialization traction. We have generated revenue through various customer and government contracts, including small-volume orders, engineering sample evaluations, non-recurring engineering (NRE) development efforts, and R&D projects. We will continue to perform on these various efforts, expand our business development and marketing efforts, further engage with our manufacturing partners, and continue our efforts toward volume production and commercialization. We expect to rely on such external capabilities to scale our production capacity in support of high-volume markets.
Previous report
Limited Operating History
Previous report
We have a limited operating history and our operations remain in the development stage. To date, our activities have been primarily concentrated on product design, engineering validation, prototyping, and establishing manufacturing and supply chain relationships. We have not yet generated significant revenues from commercial product sales and continue to devote substantial resources to research and development, product qualification, and market readiness.
Previous report
To support these activities, we completed public offerings in March 2025 and September 2025, raising gross proceeds of $13.8 million and $25.4 million, respectively. The proceeds have been used primarily to fund research and development efforts, expand engineering capabilities, and support general corporate operations. The proceeds from the completed offerings have provided near-term capital to support our operations and ongoing development efforts. However, we continue to face risks typical of development stage companies including, but not limited to, operational and financial challenges, uncertainty in product development, and product-market fit.
Previous report
On March 20, 2026, we entered into a sales agreement, pursuant to which we may, from time to time, offer and sell shares of our common stock, par value $0.0001 per share. The Sales Agreement provides for an aggregate offering amount of up to $50.0 million of our common stock, through an “at-the-market” offering program. Proceeds from the sales will be used for general corporate purposes, including working capital and other liquidity needs.
Previous report
Components of Results of Operations
Previous report
Revenue
Previous report
Our revenue currently consists of commercial product sales and government contracts.
Previous report
Operating Expenses
Previous report
Cost of revenue consists of costs of materials, as well as direct compensation and other expenses incurred to provide deliverables that result in payment of our services performed and wafers delivered. All such costs are derived through an allocation of R&D expenses that are directly associated with specific projects. We anticipate that our cost of revenue will vary substantially depending on the nature of products and/or services delivered in each customer engagement.
Previous report
R&D expenses consist primarily of compensation and related costs for personnel, including stock-based compensation and employee benefits, costs associated with design, fabrication, packaging and testing of our devices, and facility lease and utility expenses. We expense R&D expenses as incurred.
Previous report
General and administrative expenses consist primarily of compensation and related costs for personnel, including stock-based compensation and employee benefits. In addition, general and administrative expenses include third-party consulting, legal, insurance, audit and accounting services, and office lease and utility expenses.
Previous report
Other Income (Expense)
Previous report
Amortization of discount on convertible notes represents the non-cash interest expense associated with the amortization of convertible notes issued to our debtholders.
Previous report
Changes in the fair value of derivative liabilities reflect valuation changes in the derivatives held by us.
Previous report
Income Tax Expense
Previous report
Income tax expense consists primarily of income taxes in certain state jurisdictions in which we conduct business.
Previous report
Revenue: Revenue increased $531 thousand to $3.9 million, of which $3.8 million was derived from government contracts and $41 thousand from other products and services for the nine months ended March 31, 2026. Revenue was $3.3 million, of which $3.1 million was derived from government contracts and $201 thousand from other products and services, for the same period of 2025.
Previous report
Other income (expense): Other income of $668 thousand for the nine months ended March 31, 2026 consisted of interest income, compared to other (expense) of $990 thousand for the same period of 2025, comprised of amortization of discount on convertible notes of ($715) thousand and changes in fair value of derivative liabilities of $(279) thousand, and interest income of $3 thousand.
Previous report
Certain accounting policies require us to make significant estimates and assumptions that have a material impact on the carrying value of certain assets and liabilities, and we consider these to be critical accounting policies. For a description of these critical accounting policies, see Notes to Condensed Consolidated Financial Statements, Note 1 — The Company and Basis of Presentation in this Report on Form 10-Q. Actual results could differ significantly from these estimates and assumptions, which could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods.
Reworded paragraphs (11)
Previous wording
Special Note Regarding Forward-Looking Statements
Current wording
Cautionary Note Regarding Forward-Looking Statements
Previous wording
Our results of operations for the nine months ended March 31, 2026, as compared to the same period of 2025, were as follows ($ in thousands):
Current wording
Our results of operations for the three months ended September 30, 2026, as compared to the same period of 2025, were as follows ($ in thousands):
Previous wording
Operating expenses: Operating expenses increased $5.2 million, or 114%, to $9.7 million for the nine months ended March 31, 2026, compared to $4.5 million for the same period in 2025. The increase was primarily driven by an increase in material purchases to support the delivery of our products and services associated with revenue, as well as higher compensation and related costs, including salaries, stock-based compensation and employee benefits driven by new employees hired to support the expansion of the business and scaling of operations.
Current wording
Operating expenses: Operating expenses increased $1.8 million, or 61%, to $4.8 million for the three months ended September 30, 2026, compared to $3.0 million for the same period in 2025. The increase was primarily driven by an increase in compensation and related costs, including salaries, stock-based compensation and employee benefits driven by new employees as well as increased general and administrative, and R&D expenses to support the expansion of the business and scaling of operations.
Previous wording
Income tax expense: No income tax expense was recorded for the nine months ended March 31, 2026 and 2025.
Current wording
Income tax expense: No income tax expense was recorded for the three months ended September 30, 2026 and 2025.
Previous wording
As of March 31, 2026, we had cash, cash equivalents, and a certificate of deposit totaling $37.8 million, compared to $15.7 million as of June 30, 2025. The increase in cash was primarily attributable to net proceeds from the public offerings, totaling $23.4 million. These funds are primarily held in cash on deposit and money market funds that invest 100% of their assets in short-term U.S. Treasury obligations.
Current wording
As of September 30, 2026, we had cash and cash equivalents totaling $53.9 million, compared to $56.0 million as of June 30, 2026. These funds are primarily held in cash on deposit and money market funds that invest 100% of their assets in short-term U.S. Treasury obligations.
Previous wording
Prior to the public offerings, our operations were primarily financed through the issuance of convertible notes and sales of common stock in private placement transactions. We intend to continue to use the net proceeds from the offerings to support operational growth, invest in product development, and fund working capital and general corporate purposes.
Current wording
Prior to the public offerings of common stock in March 2025 and September 2025, our operations were primarily financed through the issuance of convertible notes and sales of common stock in private placement transactions. We intend to continue to use the net proceeds from the offerings to support operational growth, invest in product development, and fund working capital and general corporate purposes.
Previous wording
On March 20, 2026, we entered into a Sales Agreement under which we may, from time to time, offer and sell shares of our common stock, par value $0.0001 per share, for aggregate gross proceeds of up to $50.0 million, through an “at-the-market” offering program. Any proceeds, if and when received, are expected to be used for general corporate purposes, including working capital and other liquidity needs.
Current wording
On March 20, 2026, we entered into a sales agreement under which we may, from time to time, offer and sell shares of our common stock, par value $0.0001 per share, for aggregate gross proceeds of up to $50.0 million, through an “at-the-market” offering program (the “ATM Program”). During the fourth quarter of fiscal year 2026, we sold 830,484 shares of our common stock under the ATM program, resulting in net proceeds of $20.1 million, after deducting commissions and other offering expenses. We did not sell any shares under the ATM program or raise any proceeds during the first quarter of fiscal year 2027.
Previous wording
As of March 31, 2026, we had net working capital, defined as total current assets less total current liabilities, of $38.6 million, compared to $16.6 million at June 30, 2025. The increase was primarily driven by a $22.8 million increase in current assets, which rose to $40.2 million from $17.3 million over the same period, largely due to a $22.0 million increase in cash and cash equivalents, including the certificate of deposit balance at June 30, 2025. Current liabilities totaled $1.5 million and $705 thousand as of March 31, 2026 and June 30, 2025, respectively, and the balances primarily consisted of accounts payable, along with accrued expenses and other short-term obligations expected to be settled within one year.
Current wording
As of September 30, 2026, we had net working capital, defined as total current assets less total current liabilities, of $53.0 million, compared to $55.4 million at June 30, 2026. The decrease was primarily driven by a $2.2 million decrease in current assets, which decreased to $55.1 million from $57.3 million over the same period, largely due to a $2.1 million decrease in cash and cash equivalents since June 30, 2026. Current liabilities totaled $2.1 million and $1.9 million as of September 30, 2026 and June 30, 2026, respectively, and the balances primarily consisted of accounts payable, along with accrued expenses and other short-term obligations expected to be settled within one year. We believe that our current cash and cash equivalents balances, cash generated from operations and our ability to raise additional funds pursuant to the ATM program will be sufficient to fund our business operations and capital expenditures for the next twelve months and beyond.
Previous wording
Net cash used in our operating activities was $1.6 million and $1.1 million for the nine months ended March 31, 2026 and 2025, respectively. For the nine months ended March 31, 2026, the net cash used in operating activities primarily resulted from a net loss of $5.1 million and a decrease in prepaids and other current assets of $699 thousand, primarily offset by non-cash stock-based compensation expense of $3.2 million and an increase in accounts payable of $612 thousand. For the nine months ended March 31, 2025, the net cash used in operating activities was primarily attributable to a net loss of $2.2 million and a decrease in accounts receivable of $1.1 million. These amounts were partially offset by non-cash expenses, including stock-based compensation expense of $1.1 million, amortization of discount on convertible notes of $715 thousand, depreciation and amortization expense of $307 thousand, and changes in fair value of derivative liabilities of $278 thousand.
Current wording
Net cash used in our operating activities was $1.7 million and $0.8 million for the three months ended September 30, 2026 and 2025, respectively. For the three months ended September 30, 2026, the net cash used in operating activities primarily resulted from a net loss of $4.3 million, primarily offset by non-cash stock-based compensation expense of $1.4 million, a decrease in prepaids and other current assets of $0.3 million and an increase in accrued expenses and other current liabilities of $0.4 million. For the three months ended September 30, 2025, the net cash used in operating activities primarily resulted from a net loss of $1.5 million, and increases in accounts receivable of $0.3 million and prepaids and other current assets of $0.2 million, primarily offset by non-cash stock-based compensation expense of $1.1 million.
Previous wording
Net cash used in our investing activities totaled $439 thousand and $85 thousand for the nine months ended March 31, 2026 and 2025, respectively. These investing activities primarily consisted of purchases of equipment.
Current wording
Net cash used in our investing activities totaled $0.3 million for each of the three months ended September 30, 2026 and 2025. These investing activities primarily consisted of purchases of equipment.
Previous wording
Net cash provided by our financing activities was $24.1 million for the nine months ended March 31, 2026, compared to $15.7 million for the same period in 2025. For the nine months ended March 31, 2026, we received $23.4 million, net of offering costs, from the public offering, $690 thousand from the exercise of stock warrants, and $103 thousand from the exercise of stock options. For the nine months ended March 1, 2025, we received $12.6 million, net of offering costs, from the public offering and $3.1 million from the issuance of convertible notes.
Current wording
Net cash used in our financing activities was $0.1 million for the three months ended September 30, 2026, compared to net cash provided by financing activities of $23.4 million for the same period in 2025. For the three months ended September 30, 2026, we received $0.2 million from the exercise of stock options and paid $0.3 million in taxes related to net share settlement of stock options and restricted stock units. For the same period in 2025, we received $23.4 million, net of offering costs, from the public offering.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest income consists primarily of interest earned in interest-bearing savings accounts, certificates of deposit held at a bank, and money market funds that invest 100% of their assets in short-term U.S. Treasury obligations.