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Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023.

 

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: 001-37850

 

ATOMERA INCORPORATED

(Exact name of registrant as specified in its charter)

 

Delaware

30-0509586

(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

750 University Avenue, Suite 280

Los Gatos, California 95032

(Address, including zip code, of registrant’s principal executive offices)

 

(408) 442-5248

(Registrant’s telephone number, including area code)

 

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 $0.001 ATOM Nasdaq Capital Market

 

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 checkmark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act: Yes ☐ No ☒

 

The number of outstanding shares of the Registrant’s Common Stock, par value $.001 per share, as of October 26, 2023 was 25,799,018.

 

 

 

   

 

 

Atomera Incorporated

 

Index

 

    Page
PART I. Financial Information  
     
Item 1. Financial Statements 3
     
  Condensed Balance Sheets – September 30, 2023 (Unaudited) and December 31, 2022 3
     
  Unaudited Condensed Statements of Operations – For the Three and Nine Months Ended September 30, 2023 and 2022 4
     
  Unaudited Condensed Statements of Comprehensive Loss – For the Three and Nine Months Ended September 30, 2023 and 2022 5
     
  Unaudited Condensed Statements of Stockholders’ Equity – For the Three and Nine Months Ended September 30, 2023 and 2022 6
     
  Unaudited Condensed Statements of Cash Flows – For the Nine Months Ended September 30, 2023 and 2022 7
     
  Notes to the Unaudited Condensed Financial Statements 8
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 20
     
Item 4. Controls and Procedures 20
     
PART II. Other Information  
   
Item 1A. Risk Factors 21
     
Item 6. Exhibits 21
     
Signatures 22

 

 

 

 

 

 

 2 

 

 

PART I. Financial Information

 

Item 1. Financial Statements

 

Atomera Incorporated

Condensed Balance Sheets

(in thousands, except per share data)

 

         
   September 30,   December 31, 
   2023   2022 
    (Unaudited)      
ASSETS          
           
Current assets:          
Cash and cash equivalents  $12,642   $21,184 
Short-term investments   7,747    – 
Interest receivable   56    – 
Prepaid expenses and other current assets   392    418 
Total current assets   20,837    21,602 
           
Property and equipment, net   129    158 
Long-term prepaid maintenance and supplies   91    91 
Security deposit   14    14 
Operating lease right-of-use asset   574    700 
Financing lease right-of-use-asset   3,184    4,164 
           
Total assets  $24,829   $26,729 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current liabilities:          
Accounts payable  $462   $397 
Accrued expenses   230    173 
Accrued payroll related expenses   698    967 
Current operating lease liability   262    245 
Current financing lease liability   1,299    1,126 
Total current liabilities   2,951    2,908 
           
Long-term operating lease liability   348    521 
Long-term financing lease liability   2,066    2,986 
           
Total liabilities   5,365    6,415 
           
Commitments and contingencies (see Note 9)   –    – 
           
Stockholders’ equity:          
Preferred stock $0.001 par value, authorized 2,500 shares; none issued and outstanding as of September 30, 2023 and December 31, 2022   –    – 
Common stock: $0.001 par value, authorized 47,500 shares; 25,804 shares issued and 25,784 outstanding as of September 30, 2023; and 23,973 shares issued and outstanding as of December 31, 2022   26    24 
Additional paid in capital   217,946    203,585 
Other comprehensive income (loss)   (3)   – 
Accumulated deficit   (198,505)   (183,295)
Total stockholders’ equity   19,464    20,314 
Total liabilities and stockholders’ equity  $24,829   $26,729 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

 3 

 

 

Atomera Incorporated

Condensed Statements of Operations

(Unaudited)

(in thousands, except per share data)

 

                 
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Revenue  $–   $2   $–   $377 
Cost of revenue   –    –    –    (81)
Gross margin   –    2    –    296 
                     
Operating expenses                    
Research and development   3,305    2,743    9,533    7,515 
General and administrative   1,683    1,567    5,200    4,882 
Selling and marketing   365    347    1,147    1,019 
Total operating expenses   5,353    4,657    15,880    13,416 
                     
Loss from operations   (5,353)   (4,655)   (15,880)   (13,120)
                     
Other income (expense)                    
Interest income   177    113    528    151 
Accretion income   112    –    221    – 
Interest expense   (47)   (60)   (151)   (200)
Other income (expense), net   72    –    72    – 
Total other income (expense), net   314    53    670    (49)
                     
Net loss  $(5,039)  $(4,602)  $(15,210)  $(13,169)
                     
Net loss per common share, basic  $(0.20)  $(0.20)  $(0.62)  $(0.57)
Net loss per common share, diluted  $(0.20)  $(0.20)  $(0.62)  $(0.57)
                     
Weighted average number of common shares outstanding, basic   25,255    23,294    24,536    23,029 
Weighted average number of common shares outstanding, diluted   25,255    23,294    24,536    23,029 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

 4 

 

 

Atomera Incorporated

Condensed Statements of Comprehensive Loss

(Unaudited)

(in thousands, except per share data)

 

                 
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Net loss  $(5,039)  $(4,602)  $(15,210)  $(13,169)
Unrealized gain (loss) on available-for-sale securities   (1)   –    (3)   – 
Net loss  $(5,040)  $(4,602)  $(15,213)  $(13,169)

 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 5 

 

 

Atomera Incorporated

Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2023 and 2022

(Unaudited)

(in thousands)

                         
   Common Stock   Additional
Paid-in		   Other
Comprehensive		   Accumulated   Total
Stockholders’		 
   Shares   Amount   Capital   Loss   Deficit   Equity 
Balance January 1, 2023   23,973   $24   $203,585   $–   $(183,295)  $20,314 
Stock-based compensation   297    –    927    –    –    927 
Stock option exercise   10    –    39    –    –    39 
At-the-market sale of stock, net of commissions and expenses   50    –    274    –    –    274 
Net loss   –    –    –    –    (5,019)   (5,019)
Unrealized gain (loss) on available-for-sale securities   –    –    –    (2)   –    (2)
Balance March 31, 2023   24,330   $24   $204,825   $(2)  $(188,314)  $16,533 
Stock-based compensation   60    –    1,030    –    –    1,030 
Stock option exercise   10    –    39    –    –    39 
At-the-market sale of stock, net of commissions and expenses   1,370    2    10,787    –    –    10,789 
Net loss   –    –    –    –    (5,152)   (5,152)
Balance June 30, 2023   25,770   $26   $216,681   $(2)  $(193,466)  $23,239 
Stock-based compensation   –    –    1,041    –    –    1,041 
Stock option exercise   10    –    39    –    –    39 
Forfeited restricted stock awards   (20)   –    –    –    –    – 
At-the-market sale of stock, net of commissions and expenses   24    –    185    –    –    185 
Net loss   –    –    –    –    (5,039)   (5,039)
Unrealized gain (loss) on available-for-sale securities   –    –    –    (1)   –    (1)
Balance September 30, 2023   25,784   $26   $217,946   $(3)  $(198,505)  $19,464 

 

                      
   Common Stock   Additional
Paid-in		    Accumulated   Total
Stockholders’		 
   Shares   Amount   Capital    Deficit   Equity 
Balance January 1, 2022   23,207   $23   $194,212    $(165,854)  $28,381 
Stock-based compensation   161    –    726     –    726 
Stock option exercise   25    –    166     –    166 
Net loss   –    –    –     (4,086)   (4,086)
Balance March 31, 2022   23,393   $23   $195,104    $(169,940)  $25,187 
Stock-based compensation   33    –    859     –    859 
At-the-market sale of stock, net of commissions and expenses   31    –    185     –    185 
Net loss   –    –    –     (4,481)   (4,481)
Balance June 30, 2022   23,457   $23   $196,148    $(174,421)  $21,750 
Stock-based compensation   –    –    889     –    889 
Stock option exercises   10    –    39          39 
At-the-market sale of stock, net of commissions and expenses   387    1    4,602     –    4,603 
Net loss   –    –    –     (4,602)   (4,602)
Balance September 30, 2022   23,854   $24   $201,678    $(179,023)  $22,679 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 6 

 

 

Atomera Incorporated

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)

 

         
   Nine Months Ended
September 30,		 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Loss  $(15,210)  $(13,169)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   60    58 
Operating lease right of use asset amortization   159    149 
Financing lease right of use asset amortization   865    938 
Stock-based compensation   2,998    2,474 
Accretion of discounts on available-for-sale securities   (198)   – 
Changes in operating assets and liabilities:          
Interest receivable   (13)   – 
Prepaid expenses and other current assets   26    (288)
Accounts payable   65    186 
Accrued expenses   57    2 
Accrued payroll expenses   (269)   193 
Operating lease liability   (189)   (125)
Deferred revenue   –    1 
Net cash used in operating activities   (11,649)   (9,581)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Acquisition of property and equipment   (31)   (26)
Purchase of available-for-sale securities   (16,595)   – 
Maturity of available-for-sale securities   9,000    – 
Net cash used in investing activities   (7,626)   (26)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from at-the-market sale of stock, net of commissions and expenses   11,248    4,788 
Proceeds from exercise of stock options   117    205 
Payments on principal of financing lease   (632)   (798)
Net cash provided by financing activities   10,733    4,195 
           
Net decrease in cash and cash equivalents   (8,542)   (5,412)
           
Cash and cash equivalents at beginning of period   21,184    28,699 
           
Cash and cash equivalents at end of period  $12,642   $23,287 
           
Supplemental information:          
Cash paid for interest  $151   $200 
Cash paid for taxes  $–   $– 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 7 

 

 

 

ATOMERA INCORPORATED

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2023 and 2022

 

1. NATURE OF OPERATIONS

 

Atomera Incorporated (“Atomera” or the “Company”) was incorporated in the state of Delaware in March 2007 under the name MEARS Technologies, Inc. and is engaged in the development, commercialization and licensing of proprietary processes and technologies for the semiconductor industry. On January 12, 2016, the Company changed its name to Atomera Incorporated.

 

Atomera is an early-stage company, having only recently begun limited revenue-generating activities, and is devoting substantially all its efforts toward technology research and development and to commercially licensing its technology to designers and manufacturers of integrated circuits.

 

2. LIQUIDITY AND MANAGEMENT PLANS

 

At September 30, 2023, the Company had cash, cash equivalents and short-term investments of approximately $20.4 million and working capital of approximately $17.9 million. The Company has generated only limited revenues since inception and has incurred recurring operating losses. Accordingly, it is subject to all the risks inherent in the financing and scaling of a business that is not generating positive cashflow.

 

The Company has primarily financed operations through private placements of equity and debt securities, the Company’s Initial Public Offering (the “IPO”) which was consummated on August 10, 2016, and subsequent public offerings of its common stock. On May 31, 2022, Atomera entered into an Equity Distribution Agreement with Oppenheimer & Co. Inc. and Craig-Hallum Capital Group LLC, as agents, under which the Company may offer and sell, from time to time at its sole discretion, shares of its $0.001 par value common stock, in “at the market” offerings to or through the agent as its sales agent, having an aggregate offering price of up to $50.0 million (the “ATM Facility”). During the nine months ended September 30, 2023, the Company sold approximately 1.4 million shares pursuant to its ATM Facility at an average price per share of approximately $8.11, resulting in approximately $11.2 million of net proceeds after deducting commissions and other offering expenses. These sales include approximately 24,000 shares sold during the three months ended September 30, 2023 at an average price of $9.17, resulting in net proceeds of approximately $185,000 after deducting commissions and other offering expenses.

 

Based on the funds it has available as of the date of the filing of this report, the Company believes that it has sufficient capital to fund its current business plans and obligations over, at least, 12 months from the date that these financial statements have been issued. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its technology, competing technological and market developments, and the need to enter into collaborations with other companies or acquire technologies to enhance or complement its current offerings. If the Company is not able to generate sufficient revenue from license fees and royalties in a timeframe that satisfies its cash needs, it will need to raise more capital. In the event it requires additional capital, it will endeavor to acquire additional funds through various financing sources, including the ATM Facility, follow-on equity offerings, debt financing and joint ventures with industry partners. In addition to use of the ATM Facility and other capital raising alternatives, the Company will consider alternatives to our current business plan that may enable it to achieve revenue-producing operations and meaningful commercial success with a smaller amount of capital. If the Company is unable to secure sufficient additional capital, it may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve cash.

 

 

 

 8 

 

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Significant accounting policies

 

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 15, 2023.

 

Basis of presentation of unaudited condensed financial information

 

The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and its results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2023. These unaudited condensed financial statements should be read in conjunction with that report.

 

Cash, cash equivalents, and short-term investments

 

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds or U.S. agency bonds. Cash and cash equivalents are carried at cost, which approximates their fair value.

 

The Company's portfolio of short-term investments is comprised solely of U.S. treasury bills and agency bonds with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss).

 

Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.

 

Adoption of recent accounting standards

 

From time to time, new accounting standards are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. No new accounting standards, issued or effective during the period ended September 30, 2023, have had or are expected to have a significant impact on the Company’s financial statements.

 

 

 

 9 

 

 

4. FAIR VALUE MEASUREMENTS

 

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”) states that fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, consists of:

  

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities.

 

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company’s cash equivalents and short-term investments that were measured at fair value on a recurring basis as Level 1 assets.

 

The Company’s cash, cash equivalents and short-term investments classified by security type as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

                        
       September 30, 2023   December 31, 2022 
   Cost   Unrealized Gain/(Loss)   Accretion of Discount   Fair Value   Cost   Fair Value 
Cash  $–   $–   $–   $–   $1   $1 
Money market funds   11,649    –    –    11,649    21,183    21,183 
US treasury bills   4,902    (1)   61    4,962    –    – 
US agency bonds   3,763    (2)   17    3,778    –    – 
Total  $20,314   $(3)  $78   $20,389   $21,184   $21,184 

 

 

5. REVENUE

 

The Company recognizes revenue in accordance with ASC No. 606. The Company generates revenues from engineering service contracts, license agreements and joint development agreements. The amount of revenue that the Company recognizes reflects the consideration it expects to receive in exchange for goods or services and such revenue is recognized when the Company satisfies a performance obligation by transferring the product or service to the customer. When the Company’s performance obligation is to grant a license, revenue is recognized either at a point in time (such as a right to use licensed technology that is under the customer’s control), or over time (typically a right to access technology without obtaining control).

 

 

 

 10 

 

 

The following table provides information about disaggregated revenue by primary geographical markets and timing of revenue recognition (in thousands):

                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Primary geographic markets                    
North America  $–   $2   $–   $77 
Asia Pacific   –    –    –    300 
Total  $–   $2   $–   $377 
                     
Timing of revenue recognition                    
Products and services transferred at a point in time  $–   $–   $–   $375 
Products and services transferred over time   –    2    –    2 
Total  $–   $2   $–   $377 

 

Unbilled contracts receivable and deferred revenue

 

Timing of revenue recognition may differ from the timing of invoicing customers. Accounts receivable includes amounts billed and currently due from customers. Unbilled contracts receivable represents unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and the right to receive payment is subject to the underlying contractual terms. Unbilled contracts receivable amounts may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date.

   

6. BASIC AND DILUTED LOSS PER SHARE

 

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding and the dilutive common stock equivalent shares outstanding during the period. The Company’s potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants and (ii) vesting of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share when their effect is dilutive. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Accordingly, basic and diluted net loss per share are equal.

 

The following potential common stock equivalents were not included in the calculation of diluted net loss per common share because the inclusion thereof would be anti-dilutive (in thousands):

        
  

Nine Months Ended

September 30,

 
   2023   2022 
Stock Options   3,370    3,019 
Unvested restricted stock   481    403 
Total   3,851    3,422 

  

 

 

 

 11 

 

 

7. LEASES

 

The Company accounts for leases over one year under ASC 842. Lease expense for the Company’s operating leases consists of the lease payments recognized on a straight-line basis over the lease term. Expenses for the Company’s financing leases consists of the amortization expenses recognized on a straight-line basis over the lease term and interest expense. The Company’s lease agreement for a tool used in the development and marketing of the Company’s technology established a monthly lease payment of $150,000 per month. The lease contains a provision for an annual adjustment of lease payments based on tool availability and usage during the preceding 12 months and the adjusted payment is calculated on August 1 of each year of the lease. Effective August 1, 2022, the lease payments for this tool were reduced to $100,824 per month for the period August 1, 2022 through July 31, 2023. This adjustment to the lease payments resulted in a reduction in the ROU and corresponding lease liability. Effective August 1, 2023, the lease payments for this tool were adjusted to $137,650 per month for the period August 1, 2023 through July 31, 2024. This adjustment to the lease payments also resulted in a reduction in the ROU and corresponding lease liability.

 

Effective May 1, 2023, the Company leased an additional 404 square feet at its Tempe office location under an amendment to its current lease. The monthly rent payment increased from $1,277 per month to $2,365 per month and the increased rent under the amended lease is accounted for as a modification to the lease under ASC 842 at the time of commencement. At the effective date of the lease amendment, a right-of-use asset of approximately $33,000 was recorded along with a short-term operating lease liability of approximately $12,000 and long-term operating lease liability of approximately $21,000. The amended lease ends in February 2026.

 

In December 2022, the Company entered into a lease agreement for a tool in Tempe, Arizona. The term of this lease is for six months beginning on January 1, 2023 with an option to extend the lease for an additional six months. The initial lease terms were $96,000 per month. In March 2023, the Company elected to extend the lease through December 31, 2023 and in consideration for this extension the remaining lease payments were reduced to $84,000. Since the lease and extension are not for more than one year, the future lease payments are not included in the lease obligations on the Company’s condensed balance sheets.

 

The Company terminated its office lease in Cambridge, Massachusetts as of March 31, 2023. The cost of the lease was $2,942 per month.

 

The components of lease costs were as follows (in thousands):

                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Financing lease costs:                    
Amortization of ROU assets  $284   $300   $865   $938 
Interest on lease liabilities   47    60    151    200 
Total financing lease costs  $331   $360   $1,016   $1,138 
                     
Operating lease costs:                    
Fixed lease costs  $66   $62   $192   $186 
Variable lease costs   1    –    1    – 
Short-term lease costs   251    9    792    29 
Total operating lease costs  $318   $71   $985   $215 

 

 

 

 12 

 

 

Future minimum payments under non-cancellable leases as of September 30, 2023 were as follows (in thousands):

        
For the Year Ended December 31,  Financing leases   Operating leases 
Remaining 2023  $329   $39 
2024   1,367    291 
2025   1,436    298 
2026   478    24 
2027 & thereafter   –    – 
Total future minimum lease payments  $3,610   $652 
Less imputed interest   (245)   (42)
Total lease liability  $3,365   $610 

 

The below table provides supplemental information and non-cash activity related to the Company’s operating and financing leases are as follows (in thousands):

                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Operating cash flow information:                    
Cash paid for amounts included in the measurement of operating lease liabilities  $55   $53   $216   $161 
Cash paid for amounts included in the measurement of financing liabilities  $300   $280   $782   $998 
Non-cash activity:                    
Right-of-use assets obtained in exchange for operating lease obligations  $–   $–   $33   $– 
Remeasurement of right-of-use asset and liability in financing lease  $(114)  $(458)  $(114)  $(458)

 

The table above does not include short-term leases that are one-year or less.

  

The weighted average remaining discount rate is 5.48% for the Company’s operating leases and 5.25% for the financing lease. The weighted average remaining lease term is 2.4 years for the Company’s operating leases and 2.8 years for the financing lease.

  

8. STOCK BASED COMPENSATION

 

In May 2017, the Company’s shareholders approved its 2017 Stock Incentive Plan (“2017 Plan”) after its 2007 Stock Incentive Plan (“2007 Plan”) had expired in March 2017. The 2017 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock and for the grant of restricted and unrestricted shares. The 2017 Plan provides for the issuance of 3,750,000 shares of common stock. As of September 30, 2023, approximately 25,000 shares remain available for issuance. In May 2023, the Company’s shareholders approved its 2023 Stock Incentive Plan (“2023 Plan”). The 2023 plan provides for the issuance of 2,000,000 shares of common stock. All employees and employees of any subsidiary (including officers and directors who are also employees), as well as all of the nonemployee directors and other consultants, advisors and other persons who provide services to the Company are eligible to receive incentive awards under the 2017 Plan and 2023 Plan. Generally, stock options and restricted stock issued under the 2017 Plan and 2023 Plan vest over a period of one to four years from the date of grant. As of September 30, 2023, approximately 1.9 million shares remain available for issuance.

 

 

 

 13 

 

 

The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and nine months ended September 30, 2023 and 2022 for stock options and restricted stock granted under the Company’s incentive plans (in thousands):

                
  

Three Months Ended

September 30,

   Nine Months Ended
September 30,		 
   2023   2022   2023   2022 
Research and development  $364   $305   $1,064   $844 
General and administrative   588    518    1,683    1,446 
Selling and Marketing   89    66    251    184 
Total  $1,041   $889   $2,998   $2,474 

 

As of September 30, 2023, there was approximately $7.6 million of total unrecognized compensation expense related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 2.6 years.

 

The weighted average grant date fair value per share of the options granted under the Company’s Plans were $4.68 and $4.94 for the three and nine months ended September 30, 2023, respectively. The weighted average grant date fair value per share of the options granted under the Company’s Plans were $8.48 and $10.37 for the three and nine months ended September 30, 2022, respectively.

 

The following table summarizes stock option activity during the nine months ended September 30, 2023 (in thousands except exercise prices and contractual terms):

                
  

Number of

Shares

  

Weighted-

Average

Exercise

Prices per Share

  

Weighted-
Average

Remaining

Contractual

Term (In Years)

   Intrinsic
Value		 
Outstanding at January 1, 2023   3,009   $7.07           
Granted   391   $6.54           
Exercised   (30)  $3.90           
Outstanding at September 30, 2023   3,370   $7.03    4.9   $2,234 
Exercisable at September 30, 2023   2,788   $6.60    4.1   $2,087 

 

During the nine months ended September 30, 2023, the Company granted options under the 2017 Plan to purchase approximately 391,000 shares of its common stock to its employees and consultants. The fair value of these options was approximately $2.0 million at the time of grant.

 

 

 

 14 

 

 

The Company issues restricted stock to employees, directors and consultants and estimates the fair value based on the closing price on the day of grant. The following table summarizes all restricted stock activity during the nine months ended September 30, 2023 (in thousands except per share data):

        
  

Number of

Shares

  

Weighted-Average

Grant Date Fair Value per Share

 
Outstanding at January 1, 2023   340   $10.78 
Granted   357   $7.00 
Forfeited   (20)  $8.63 
Vested   (196)  $8.63 
Outstanding non-vested shares at September 30, 2023   481   $8.94 

 

During the nine months ended September 30, 2023, the Company granted approximately 357,000 restricted stock awards under the 2017 and 2023 Plans. The fair value of these awards was approximately $2.5 million at the time of grant.

  

9. COMMITMENTS AND CONTINGENCIES

 

Litigation, Claims and Assessments

 

The Company may be subject to periodic lawsuits, investigations and claims that arise in the ordinary course of business. The Company is not party to any material litigation as of September 30, 2023, or through the date these financial statements have been issued.

  

10. SUBSEQUENT EVENTS

 

Management has evaluated subsequent events and transactions through the date these financial statements were issued.

 

Since September 30, 2023, the Company has issued approximately 15,000 additional shares through its ATM offering at an average price per share of $7.13 resulting in additional net proceeds of approximately $104,000.

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 15 

 

 

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

 

The following discussion and analysis of the financial condition and results of operations of Atomera Incorporated should be read in conjunction with our financial statements and the accompanying notes that appear elsewhere in this Quarterly Report. Statements in this Quarterly Report on Form 10-Q include forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks, uncertainties, and changes in condition, significance, value and effect, including those risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 15, 2023. Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results to differ materially from those expressed herein and in ways not readily foreseeable. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report and are based on information currently and reasonably known to us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

Overview

 

We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $550+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST®, is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick. MST can be applied as a transistor channel enhancement to CMOS-type transistors, the most widely used transistor type in the semiconductor industry. MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability and power efficiency. In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial scale, with equipment commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, memory and optical integrated circuits.

 

We do not intend to design or manufacture integrated circuits directly. Instead, we develop and license technologies and processes that we believe offer the designers and manufacturers of integrated circuits a low-cost solution to the industry’s need for greater performance and lower power consumption. Our customers and partners include:

 

·   foundries, which manufacture integrated circuits on behalf of fabless manufacturers;
     
·   integrated device manufacturers, or IDMs, which are the fully-integrated designers and manufacturers of integrated circuits;
     
·   fabless semiconductor manufacturers, which are designers of integrated circuits that outsource the manufacturing of their chips to foundries;
     
·   original equipment manufacturers, or OEMs, that manufacture the epitaxial, or epi, equipment used to deposit semiconductor layers, such as the MST film, onto silicon wafers; and
     
·   electronic design automation companies, which make tools used throughout the industry to simulate performance of semiconductor products using different materials, design structures and process technologies.

 

 

 

 16 

 

 

Our commercialization strategy is to generate revenue through licensing arrangements whereby foundries, IDMs and fabless semiconductor manufacturers pay us a license fee for their right to use MST technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer or device that incorporates our MST technology. We also license our MSTcadTM software to our customers for use in simulating the effects of using MST technology on their wafers and/or devices. To date, we have generated revenue from (i) licensing agreements with two IDMs, one fabless manufacturer and one foundry, (ii) a joint development agreement, or JDA, with a leading semiconductor provider, (iii) engineering services provided to foundries, IDMs and fabless companies and (iv) licensing MSTcad.

 

In April 2023, we entered into a license agreement with ST Microelectronics (“ST”) that authorizes ST to manufacture and distribute MST-enabled products to its customers. This agreement provides for payment of license fees payable upon reaching milestones consistent with Atomera’s standard business model. Our standard model is based around two major milestones, namely the installation of MST in a customer’s fab and qualification of an MST-enabled process. After process qualification is completed, ST will have the right to commercially distribute MST-enabled products and, assuming ST brings such products to market, we will receive royalties on all MST-enabled products manufactured for commercial purposes. This license agreement with ST is our first grant of commercial manufacturing and distribution rights and, assuming the successful installation of MST and related process qualification, would result in our first revenue from commercial use of MST-enabled products. There can be no assurance, however, that ST will pursue the licensed rights through development to the manufacture and commercial sale of MST-enabled products.

 

We were organized as a Delaware limited liability company under the name Nanovis LLC on November 26, 2001. On March 13, 2007, we converted to a Delaware corporation under the name Mears Technologies, Inc. On January 12, 2016, we changed our name to Atomera Incorporated.

 

On May 31, 2022, we entered into an Equity Distribution Agreement with Oppenheimer & Co. Inc and Craig-Hallum Capital Group LLC, as agents, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million in an “at-the-market” offering or “ATM”, to or through the agents. During the nine months ended September 30, 2023, we sold approximately 1.4 million shares pursuant to our ATM at an average price per share of approximately $8.11, resulting in approximately $11.2 million of net proceeds to us after deducting commissions and other offering expenses. These sales include approximately 24,000 shares sold during the three months ended September 30, 2023 at an average price of $9.17, resulting in net proceeds of approximately $185,000 after deducting commissions and other offering expenses.

 

Results of Operations

 

Revenues. To date, we have only generated limited revenue from customer engagements for engineering services, integration license agreements, a manufacturing license granted under a JDA and licensing of MSTcad. Our license agreement with ST, which was executed in April 2023, is our first commercial manufacturing and distribution agreement and, assuming successful completion of contractual milestones and payments of associated fees, will entitle us to royalties on all MST-enabled products manufactured for commercial purposes. Our engineering services consist of depositing our MST film on semiconductor wafers, delivering such wafers to customers to finalize building devices, and performing tests for customers evaluating MST. The integration license agreements we have entered into grant the licensees the right to build products that integrate our MST technology deposited by us onto their semiconductor wafers, but the agreements do not grant the licensees the rights to manufacture MST-enabled wafers in their facilities or to sell products incorporating MST. Our first JDA included the grant of a manufacturing license to our customer and we were paid for such license when we delivered our IP transfer package which enabled our customer to install MST in a tool in their facility and to use it to manufacture wafers for internal use. This JDA also contained targeted technical specifications that, if met, would result in payment of a success fee to us. Those technical objectives were met and we have collected the success fee.

 

For revenue recognition purposes, we have determined that the grant of rights in integration licenses is not distinct from the delivery of engineering services, and therefore revenue from both integration licenses and engineering services is recognized as the services are provided to the customer. In general, this is proportionate to the delivery to the customer of wafers processed with MST, but if the agreements do not specify a time and quantity of wafer delivery, we will record revenue over the period of time in which we anticipate delivering an estimated quantity of wafers. We have also determined that the grant of our manufacturing license under the JDA confers a right to use our technology and accordingly revenue was recognized at the point in time when we delivered our IP transfer package. The success fee under our JDA was treated as engineering services revenue and recognized upon our customer’s confirmation that the JDA’s technical objectives had been met. Our MSTcad licenses grant customers the right to use MSTcad software to simulate the effects of incorporating MST technology into their semiconductor manufacturing process. MSTcad licenses are granted on a monthly basis and revenue is recognized over time.

 

Revenue was not recorded for the three months or nine months ended September 30, 2023. Revenue for the three and nine months ended September 30, 2022 was $2,000 and $377,000, respectively. Our revenue in 2022 consisted of a success fee pursuant to our first JDA and a license fee paid under an integration license agreement.

 

 

 

 17 

 

 

Cost of revenue. Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide deliverables that resulted in payment of our success fee and wafers delivered as part of the integration license agreement. No costs of revenue were recorded for the three months ended September 30, 2023 and 2022. Cost of revenue for the nine months ended September 30, 2023 and 2022 was $0 and approximately $81,000, respectively. We anticipate that our cost of revenue will vary substantially depending on the mix of license and engineering services revenues we receive and the nature of products and/or services delivered in each customer engagement.

 

Operating expenses. Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the three months ended September 30, 2023 and 2022, our operating expenses totaled approximately $5.4 million and $4.7 million, respectively. For the nine months ended September 30, 2023 and 2022, our operating expenses totaled approximately $15.9 million and $13.4 million, respectively.

 

Research and development expense. To date, our operations have focused on the research, development, patent prosecution, and commercialization of our MST technology and related technologies such as MSTcad. Our research and development costs primarily consist of payroll and benefits costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology.

 

For the three months ended September 30, 2023 and 2022, we incurred approximately $3.3 million and $2.7 million, respectively, of research and development expenses, an increase of approximately $562,000, or 20%. This increase was primarily due to increases of approximately $355,000 in outsourced research and development mainly due to price increases for outsourced foundry services combined with an increase in the number of wafers processed. The increase in research and development expenses also reflected increases of approximately $81,000 in employee-related expenses resulting from new hires, and approximately $82,000 in technical consulting expenses.

 

For the nine months ended September 30, 2023 and 2022, we incurred approximately $9.5 million and $7.5 million, respectively, of research and development expense, an increase of approximately $2.0 million, or 27%. The increase was primarily due to outsourced research and development which increased by approximately $977,000 due to price increases and a higher number of wafers processed. The other main factors that drove the increase in research and development expense were increases of approximately $495,000 in employee costs for new hires, approximately $227,000 in technical consulting and approximately $100,000 in wafer purchases to support our research efforts.

 

General and administrative expense. General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees. General and administrative costs were approximately $1.7 million and $1.6 million for the three months ended September 30, 2023 and 2022, respectively, representing an increase of approximately $116,000, or 7%. The increase is primarily related to an increase of approximately $123,000 in legal fees related to our intellectual property portfolio offset by a decrease in employee-related expenses.

 

General and administrative costs were approximately $5.2 million and $4.9 million for the nine months ended September 30, 2023 and 2022, respectively, representing an increase of approximately $318,000, or 7%. The increase is primarily related to an increase in stock-based compensation costs of approximately $237,000 and an increase of approximately $83,000 in legal fees. 

 

Selling and marketing expense. Selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel and business development consulting services. Selling and marketing expenses for the three months ended September 30, 2023 and 2022 were approximately $365,000 and $347,000, respectively, representing an increase of approximately $18,000, or 5%. The increase in costs is primarily related to increased travel and stock-based compensation costs offset by a decrease in employee-related expenses.

 

Selling and marketing expenses for the nine months ended September 30, 2023 and 2022 were approximately $1.1 million and $1.0 million, respectively, representing an increase of approximately $128,000, or 13%. The increase in costs is primarily related to increased travel and stock-based compensation costs.

 

 

 

 18 

 

 

Interest income. Interest income for three months ended September 30, 2023 and 2022 was approximately $177,000 and $113,000, respectively. Interest income for nine months ended September 30, 2023 and 2022 was approximately $528,000 and $151,000, respectively. Interest income for the periods presented related to interest earned on our cash, cash equivalents and short-term investments.

 

Accretion income. Accretion income for the three and nine months ended September 30, 2023, was approximately $112,000 and $221,000, respectively. Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date. There was no income from accretion for the three or nine months ended September 30, 2022.

 

Interest expense. Interest expense for the three months ended September 30, 2023 and 2022 was approximately $47,000 and $60,000, respectively. Interest expense for the nine months September 30, 2023 and 2022 was approximately $151,000 and $200,000, respectively. Interest expense is related to the tool financing lease entered into in August 2021.

 

Other income/expense, net. Other income for the three and nine months ended September 30, 2023 of approximately $72,000, consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services.

 

Cash Flows from Operating, Investing and Financing Activities

 

Net cash used in operating activities of approximately $11.6 million for the nine months ended September 30, 2023 resulted primarily from our net loss of approximately $15.2 million offset by approximately $3.0 million of stock-based compensation and approximately $1.0 million of amortization of right-of-use assets.

 

Net cash used in operating activities of approximately $9.6 million for the nine months ended September 30, 2022 resulted primarily from our net loss of approximately $13.2 million offset by approximately $2.5 million stock-based compensation and approximately $1.1 million in amortization of right-of-use assets. 

 

Net cash used in investing activities of approximately $7.6 million and for the nine months ended September 30, 2023 consisted primarily of the purchase of short-term available-for-sale investments, offset by the maturity of short-term available-for-sale investments Net cash used in investing activities of approximately $26,000 for the nine months ended September 30, 2022 consisted of the purchase of computers and lab tools in Tempe, AZ. 

 

Net cash provided by financing activities of approximately $10.7 million for the nine months ended September 30, 2023 primarily related to the net proceeds from our ATM offering, offset by the principal payments on our financing lease.

 

Net cash provided by financing activities of approximately $4.2 million for the nine months ended September 30, 2022 primarily related to the net proceeds from our ATM offering, offset by the principal payments on our financing lease.

 

Liquidity and Capital Resources

 

As of September 30, 2023, we had cash and cash equivalents of approximately $12.6 million, short-term investments of approximately $7.7 million and working capital of approximately $17.9 million. For nine months ended September 30, 2023, we had a net loss of approximately $15.2 million and used approximately $11.6 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.

 

 

 

 19 

 

 

During the nine months ended September 30, 2023, we sold approximately 1.4 million shares pursuant to our ATM at an average price per share of approximately $8.11, resulting in approximately $11.2 million of net proceeds to us after deducting commissions and other offering expenses. Since September 30, 2023 we have sold approximately 15,000 additional shares through our ATM offering at an average price per share of $7.13 resulting in additional net proceeds of approximately $104,000.

 

We believe that our available working capital is sufficient to fund our presently forecasted working capital requirements for, at least, the next 12 months following the date of the filing of this report. However, our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our MST technology, competing technological and market developments, and the need to enter into collaborations with other companies or acquire technologies to enhance or complement our current offerings. If we are not able to generate sufficient revenue from license fees and royalties in a timeframe that satisfies our cash needs, we will need to raise more capital. In the event we require additional capital, we will endeavor to acquire additional funds through various financing sources, including our ATM Facility, follow-on equity offerings, debt financing and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue-producing operations and meaningful commercial success with a smaller amount of capital. If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve cash.

 

Critical Accounting Estimates

 

There have been no changes to our critical accounting estimates from those included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 15, 2023.

 

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

 

Not applicable.

  

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our chief executive officer and principal financial and accounting officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on this evaluation, management concluded that our disclosure controls and procedures were effective as of September 30, 2023.

 

Changes in Internal Control over Financial Reporting

 

There have not been any changes to our internal controls over financial reporting (as defined by Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the three-month period ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 

 

 

 20 

 

 

PART II. Other Information

 

Item 1A. Risk Factors

 

The primary risk factors affecting our business have not changed materially from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 15, 2023, except as follows:

 

In February 2024, we will be losing access to certain semiconductor manufacturing and engineering services which may be difficult to replace. Since 2016, we have worked with TSI Technology Development & Commercialization Services LLC, or TSI under a Master R&D Services Agreement and a Manufacturing Agreement. Under these agreements, TSI provides us with foundry services, consisting of engineering and manufacturing services. In August 2023, TSI was acquired by Robert Bosch Semiconductor LLC, or Bosch. In October 2023, Bosch advised us that on January 31, 2024 it will cease providing engineering and manufacturing services to third parties, including Atomera, in order to commence the conversion of the TSI fab to production of Silicon Carbide semiconductor products. We have an ongoing search for a replacement provider of foundry services. However, there are few foundries that offer R&D services that are comparable to those, provided by TSI, so we may face difficulty in finding a replacing the services currently. We have utilized TSI’s services for a portion of our internal R&D which required complete semiconductor device fabrication. No wafers sold or licensed to any customer have been fabricated at TSI. Accordingly, we do not believe that the loss of TSI’s services will have a meaningful impact on any of our ongoing client engagements. However, we believe it is likely that our access to foundry services will be interrupted while we reach agreement with a replacement foundry and adapt our R&D processes to those used at a new provider. This transition may cause us to incur meaningful startup costs and may divert engineering resources from ongoing R&D activities. The potential inability to replace the TSI services in a timely manner may have a material adverse effect on the timing and cost of continuing to develop example applications and devices which exhibit the advantages of our MST technology.

 

Item 6. Exhibits

 

The following is a list of exhibits filed as part of this Report on Form 10-Q:

 

Exhibit

No.

   Description   Method of filing

 

31.1   Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   Filed electronically herewith
         
31.2   Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   Filed electronically herewith
         
32.1   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)   Filed electronically herewith
         
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)   Filed electronically herewith
         
101.SCH   Inline XBRL Taxonomy Extension Schema Document   Filed electronically herewith
         
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document   Filed electronically herewith
         
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document   Filed electronically herewith
         
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document   Filed electronically herewith
         
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document   Filed electronically herewith
         
104   Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).   Filed electronically herewith

 

 

 

 21 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and the on the date indicated.

 

  ATOMERA INCORPORATED.  
     
Date: November 1, 2023 By: /s/ Scott A. Bibaud  
    Scott A. Bibaud
Chief Executive Officer,		  
    (Principal Executive Officer)  
    and Director  
       
       
Date: November 1, 2023 By: /s/ Francis B. Laurencio  
    Francis B. Laurencio  
    Chief Financial Officer  
    (Principal Financial and  
    Accounting Officer)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 22 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Scott A. Bibaud, certify that:

 

(1) I have reviewed this Form 10-Q of Atomera Incorporated (the “Company”);
   
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
   
(4) The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d- 15(f)) for the company and have:
     
  (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this report based on such evaluation; and
     
  (d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; And
     
(5) The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
     
  (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
     
  (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

  ATOMERA INCORPORATED
     
     
Date: November 1, 2023 By: /s/ Scott A. Bibaud
    Scott A. Bibaud, Chief Executive Officer

 

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, Francis B. Laurencio, certify that:

 

(1) I have reviewed this Form 10-Q of Atomera Incorporated (the “Company”);
   
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
   
(4) The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d- 15(f)) for the company and have:
     
  (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this report based on such evaluation; and
     
  (d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; And
     
(5) The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
     
  (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
     
  (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

  ATOMERA INCORPORATED
     
     
Date: November 1, 2023 By: /s/ Francis B. Laurencio
   

Francis B. Laurencio, Chief Financial Officer

(Principal Financial Officer)

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18

U.S.C. 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Atomera Incorporated (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott A. Bibaud, the Chief Executive Officer, and Francis B. Laurencio, the Chief Financial Officer, of the Company, respectively, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

By: /s/ Scott A. Bibaud   Dated: November 1, 2023
  Scott A. Bibaud    
  Title: President and Chief Executive Officer    
       
By: /s/ Francis B. Laurencio   Dated: November 1, 2023
  Francis B. Laurencio    
  Title:  Chief Financial Officer    

 

This certification is made solely for the purposes of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

 

 

v3.23.3
Cover - shares
 9 Months Ended
Sep. 30, 2023
Oct. 26, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2023  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2023  
Current Fiscal Year End Date --12-31  
Entity File Number 001-37850  
Entity Registrant Name ATOMERA INCORPORATED  
Entity Central Index Key 0001420520  
Entity Tax Identification Number 30-0509586  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 750 University Avenue  
Entity Address, Address Line Two Suite 280  
Entity Address, City or Town Los Gatos  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 95032  
City Area Code (408)  
Local Phone Number 442-5248  
Title of 12(b) Security Common stock: Par value $0.001  
Trading Symbol ATOM  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   25,799,018
v3.23.3
Condensed Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 12,642 $ 21,184
Short-term investments 7,747 0
Interest receivable 56 0
Prepaid expenses and other current assets 392 418
Total current assets 20,837 21,602
Property and equipment, net 129 158
Long-term prepaid maintenance and supplies 91 91
Security deposit 14 14
Operating lease right-of-use asset 574 700
Financing lease right-of-use-asset 3,184 4,164
Total assets 24,829 26,729
Current liabilities:    
Accounts payable 462 397
Accrued expenses 230 173
Accrued payroll related expenses 698 967
Current operating lease liability 262 245
Current financing lease liability 1,299 1,126
Total current liabilities 2,951 2,908
Long-term operating lease liability 348 521
Long-term financing lease liability 2,066 2,986
Total liabilities 5,365 6,415
Commitments and contingencies (see Note 9)
Stockholders’ equity:    
Preferred stock $0.001 par value, authorized 2,500 shares; none issued and outstanding as of September 30, 2023 and December 31, 2022 0 0
Common stock: $0.001 par value, authorized 47,500 shares; 25,804 shares issued and 25,784 outstanding as of September 30, 2023; and 23,973 shares issued and outstanding as of December 31, 2022 26 24
Additional paid in capital 217,946 203,585
Other comprehensive income (loss) (3) 0
Accumulated deficit (198,505) (183,295)
Total stockholders’ equity 19,464 20,314
Total liabilities and stockholders’ equity $ 24,829 $ 26,729
v3.23.3
Condensed Balance Sheets (Parenthetical) - $ / shares
shares in Thousands
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 2,500 2,500
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 47,500 47,500
Common stock, shares issued 25,804 23,973
Common stock, shares outstanding 25,784 23,973
v3.23.3
Condensed Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Revenue $ 0 $ 2 $ 0 $ 377
Cost of revenue 0 0 0 (81)
Gross margin 0 2 0 296
Operating expenses        
Research and development 3,305 2,743 9,533 7,515
General and administrative 1,683 1,567 5,200 4,882
Selling and marketing 365 347 1,147 1,019
Total operating expenses 5,353 4,657 15,880 13,416
Loss from operations (5,353) (4,655) (15,880) (13,120)
Other income (expense)        
Interest income 177 113 528 151
Accretion income 112 0 221 0
Interest expense (47) (60) (151) (200)
Other income (expense), net 72 0 72 0
Total other income (expense), net 314 53 670 (49)
Net loss $ (5,039) $ (4,602) $ (15,210) $ (13,169)
Net loss per common share, basic $ (0.20) $ (0.20) $ (0.62) $ (0.57)
Net loss per common share, diluted $ (0.20) $ (0.20) $ (0.62) $ (0.57)
Weighted average number of common shares outstanding, basic 25,255 23,294 24,536 23,029
Weighted average number of common shares outstanding, diluted 25,255 23,294 24,536 23,029
v3.23.3
Condensed Statements of Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Net loss $ (5,039) $ (4,602) $ (15,210) $ (13,169)
Unrealized gain (loss) on available-for-sale securities (1) 0 (3) 0
Net loss $ (5,040) $ (4,602) $ (15,213) $ (13,169)
v3.23.3
Statements of Stockholders' Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 23 $ 194,212   $ (165,854) $ 28,381
Beginning balance, shares at Dec. 31, 2021 23,207        
Stock-based compensation 726   726
Stock-based compensation, shares 161        
Stock option exercises 166   166
Stock option exercises, shares 25        
Net loss   (4,086) (4,086)
Ending balance, value at Mar. 31, 2022 $ 23 195,104   (169,940) 25,187
Ending balance, shares at Mar. 31, 2022 23,393        
Beginning balance, value at Dec. 31, 2021 $ 23 194,212   (165,854) 28,381
Beginning balance, shares at Dec. 31, 2021 23,207        
Net loss         (13,169)
Unrealized gain (loss) on available-for-sale securities         0
Ending balance, value at Sep. 30, 2022 $ 24 201,678   (179,023) 22,679
Ending balance, shares at Sep. 30, 2022 23,854        
Beginning balance, value at Mar. 31, 2022 $ 23 195,104   (169,940) 25,187
Beginning balance, shares at Mar. 31, 2022 23,393        
Stock-based compensation 859   859
Stock-based compensation, shares 33        
At-the-market sale of stock, net of commissions and expenses 185   185
At-the-market sale of stock, net of commissions and expenses, shares 31        
Net loss   (4,481) (4,481)
Ending balance, value at Jun. 30, 2022 $ 23 196,148   (174,421) 21,750
Ending balance, shares at Jun. 30, 2022 23,457        
Stock-based compensation 889   889
Stock option exercises 39     39
Stock option exercises, shares 10        
At-the-market sale of stock, net of commissions and expenses $ 1 4,602   4,603
At-the-market sale of stock, net of commissions and expenses, shares 387        
Net loss   (4,602) (4,602)
Unrealized gain (loss) on available-for-sale securities         0
Ending balance, value at Sep. 30, 2022 $ 24 201,678   (179,023) 22,679
Ending balance, shares at Sep. 30, 2022 23,854        
Beginning balance, value at Dec. 31, 2022 $ 24 203,585 $ 0 (183,295) 20,314
Beginning balance, shares at Dec. 31, 2022 23,973        
Stock-based compensation 927 927
Stock-based compensation, shares 297        
Stock option exercises 39 39
Stock option exercises, shares 10        
At-the-market sale of stock, net of commissions and expenses 274 274
At-the-market sale of stock, net of commissions and expenses, shares 50        
Net loss (5,019) (5,019)
Unrealized gain (loss) on available-for-sale securities (2) (2)
Ending balance, value at Mar. 31, 2023 $ 24 204,825 (2) (188,314) 16,533
Ending balance, shares at Mar. 31, 2023 24,330        
Beginning balance, value at Dec. 31, 2022 $ 24 203,585 0 (183,295) 20,314
Beginning balance, shares at Dec. 31, 2022 23,973        
Net loss         (15,210)
Unrealized gain (loss) on available-for-sale securities         (3)
Ending balance, value at Sep. 30, 2023 $ 26 217,946 (3) (198,505) 19,464
Ending balance, shares at Sep. 30, 2023 25,784        
Beginning balance, value at Mar. 31, 2023 $ 24 204,825 (2) (188,314) 16,533
Beginning balance, shares at Mar. 31, 2023 24,330        
Stock-based compensation 1,030 1,030
Stock-based compensation, shares 60        
Stock option exercises 39 39
Stock option exercises, shares 10        
At-the-market sale of stock, net of commissions and expenses $ 2 10,787 10,789
At-the-market sale of stock, net of commissions and expenses, shares 1,370        
Net loss (5,152) (5,152)
Ending balance, value at Jun. 30, 2023 $ 26 216,681 (2) (193,466) 23,239
Ending balance, shares at Jun. 30, 2023 25,770        
Stock-based compensation 1,041 1,041
Stock option exercises 39 39
Stock option exercises, shares 10        
Forfeited restricted stock awards
Forfeited restricted stock awards, shares (20)        
At-the-market sale of stock, net of commissions and expenses 185 185
At-the-market sale of stock, net of commissions and expenses, shares 24        
Net loss (5,039) (5,039)
Unrealized gain (loss) on available-for-sale securities (1) (1)
Ending balance, value at Sep. 30, 2023 $ 26 $ 217,946 $ (3) $ (198,505) $ 19,464
Ending balance, shares at Sep. 30, 2023 25,784        
v3.23.3
Condensed Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES    
Net Loss $ (15,210) $ (13,169)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 60 58
Operating lease right of use asset amortization 159 149
Financing lease right of use asset amortization 865 938
Stock-based compensation 2,998 2,474
Accretion of discounts on available-for-sale securities (198) 0
Changes in operating assets and liabilities:    
Interest receivable (13) 0
Prepaid expenses and other current assets 26 (288)
Accounts payable 65 186
Accrued expenses 57 2
Accrued payroll expenses (269) 193
Operating lease liability (189) (125)
Deferred revenue 0 1
Net cash used in operating activities (11,649) (9,581)
CASH FLOWS FROM INVESTING ACTIVITIES    
Acquisition of property and equipment (31) (26)
Purchase of available-for-sale securities (16,595) 0
Maturity of available-for-sale securities 9,000 0
Net cash used in investing activities (7,626) (26)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from at-the-market sale of stock, net of commissions and expenses 11,248 4,788
Proceeds from exercise of stock options 117 205
Payments on principal of financing lease (632) (798)
Net cash provided by financing activities 10,733 4,195
Net decrease in cash and cash equivalents (8,542) (5,412)
Cash and cash equivalents at beginning of period 21,184 28,699
Cash and cash equivalents at end of period 12,642 23,287
Supplemental information:    
Cash paid for interest 151 200
Cash paid for taxes $ 0 $ 0
v3.23.3
NATURE OF OPERATIONS
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
NATURE OF OPERATIONS

 

1. NATURE OF OPERATIONS

 

Atomera Incorporated (“Atomera” or the “Company”) was incorporated in the state of Delaware in March 2007 under the name MEARS Technologies, Inc. and is engaged in the development, commercialization and licensing of proprietary processes and technologies for the semiconductor industry. On January 12, 2016, the Company changed its name to Atomera Incorporated.

 

Atomera is an early-stage company, having only recently begun limited revenue-generating activities, and is devoting substantially all its efforts toward technology research and development and to commercially licensing its technology to designers and manufacturers of integrated circuits.
v3.23.3
LIQUIDITY AND MANAGEMENT PLANS
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
LIQUIDITY AND MANAGEMENT PLANS

 

2. LIQUIDITY AND MANAGEMENT PLANS

 

At September 30, 2023, the Company had cash, cash equivalents and short-term investments of approximately $20.4 million and working capital of approximately $17.9 million. The Company has generated only limited revenues since inception and has incurred recurring operating losses. Accordingly, it is subject to all the risks inherent in the financing and scaling of a business that is not generating positive cashflow.

 

The Company has primarily financed operations through private placements of equity and debt securities, the Company’s Initial Public Offering (the “IPO”) which was consummated on August 10, 2016, and subsequent public offerings of its common stock. On May 31, 2022, Atomera entered into an Equity Distribution Agreement with Oppenheimer & Co. Inc. and Craig-Hallum Capital Group LLC, as agents, under which the Company may offer and sell, from time to time at its sole discretion, shares of its $0.001 par value common stock, in “at the market” offerings to or through the agent as its sales agent, having an aggregate offering price of up to $50.0 million (the “ATM Facility”). During the nine months ended September 30, 2023, the Company sold approximately 1.4 million shares pursuant to its ATM Facility at an average price per share of approximately $8.11, resulting in approximately $11.2 million of net proceeds after deducting commissions and other offering expenses. These sales include approximately 24,000 shares sold during the three months ended September 30, 2023 at an average price of $9.17, resulting in net proceeds of approximately $185,000 after deducting commissions and other offering expenses.

 

Based on the funds it has available as of the date of the filing of this report, the Company believes that it has sufficient capital to fund its current business plans and obligations over, at least, 12 months from the date that these financial statements have been issued. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its technology, competing technological and market developments, and the need to enter into collaborations with other companies or acquire technologies to enhance or complement its current offerings. If the Company is not able to generate sufficient revenue from license fees and royalties in a timeframe that satisfies its cash needs, it will need to raise more capital. In the event it requires additional capital, it will endeavor to acquire additional funds through various financing sources, including the ATM Facility, follow-on equity offerings, debt financing and joint ventures with industry partners. In addition to use of the ATM Facility and other capital raising alternatives, the Company will consider alternatives to our current business plan that may enable it to achieve revenue-producing operations and meaningful commercial success with a smaller amount of capital. If the Company is unable to secure sufficient additional capital, it may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve cash.

 
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Significant accounting policies

 

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 15, 2023.

 

Basis of presentation of unaudited condensed financial information

 

The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and its results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2023. These unaudited condensed financial statements should be read in conjunction with that report.

 

Cash, cash equivalents, and short-term investments

 

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds or U.S. agency bonds. Cash and cash equivalents are carried at cost, which approximates their fair value.

 

The Company's portfolio of short-term investments is comprised solely of U.S. treasury bills and agency bonds with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss).

 

Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.

 

Adoption of recent accounting standards

 

From time to time, new accounting standards are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. No new accounting standards, issued or effective during the period ended September 30, 2023, have had or are expected to have a significant impact on the Company’s financial statements.

 
v3.23.3
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

 

4. FAIR VALUE MEASUREMENTS

 

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”) states that fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, consists of:

  

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities.

 

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company’s cash equivalents and short-term investments that were measured at fair value on a recurring basis as Level 1 assets.

 

The Company’s cash, cash equivalents and short-term investments classified by security type as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

                        
       September 30, 2023   December 31, 2022 
   Cost   Unrealized Gain/(Loss)   Accretion of Discount   Fair Value   Cost   Fair Value 
Cash  $–   $–   $–   $–   $1   $1 
Money market funds   11,649    –    –    11,649    21,183    21,183 
US treasury bills   4,902    (1)   61    4,962    –    – 
US agency bonds   3,763    (2)   17    3,778    –    – 
Total  $20,314   $(3)  $78   $20,389   $21,184   $21,184 

 
v3.23.3
REVENUE
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
REVENUE

 

5. REVENUE

 

The Company recognizes revenue in accordance with ASC No. 606. The Company generates revenues from engineering service contracts, license agreements and joint development agreements. The amount of revenue that the Company recognizes reflects the consideration it expects to receive in exchange for goods or services and such revenue is recognized when the Company satisfies a performance obligation by transferring the product or service to the customer. When the Company’s performance obligation is to grant a license, revenue is recognized either at a point in time (such as a right to use licensed technology that is under the customer’s control), or over time (typically a right to access technology without obtaining control).

 

The following table provides information about disaggregated revenue by primary geographical markets and timing of revenue recognition (in thousands):

                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Primary geographic markets                    
North America  $–   $2   $–   $77 
Asia Pacific   –    –    –    300 
Total  $–   $2   $–   $377 
                     
Timing of revenue recognition                    
Products and services transferred at a point in time  $–   $–   $–   $375 
Products and services transferred over time   –    2    –    2 
Total  $–   $2   $–   $377 

 

Unbilled contracts receivable and deferred revenue

 

Timing of revenue recognition may differ from the timing of invoicing customers. Accounts receivable includes amounts billed and currently due from customers. Unbilled contracts receivable represents unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and the right to receive payment is subject to the underlying contractual terms. Unbilled contracts receivable amounts may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date.
v3.23.3
BASIC AND DILUTED LOSS PER SHARE
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
BASIC AND DILUTED LOSS PER SHARE

   

6. BASIC AND DILUTED LOSS PER SHARE

 

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding and the dilutive common stock equivalent shares outstanding during the period. The Company’s potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants and (ii) vesting of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share when their effect is dilutive. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Accordingly, basic and diluted net loss per share are equal.

 

The following potential common stock equivalents were not included in the calculation of diluted net loss per common share because the inclusion thereof would be anti-dilutive (in thousands):

        
  

Nine Months Ended

September 30,

 
   2023   2022 
Stock Options   3,370    3,019 
Unvested restricted stock   481    403 
Total   3,851    3,422 

  
v3.23.3
LEASES
 9 Months Ended
Sep. 30, 2023
Leases  
LEASES

 

7. LEASES

 

The Company accounts for leases over one year under ASC 842. Lease expense for the Company’s operating leases consists of the lease payments recognized on a straight-line basis over the lease term. Expenses for the Company’s financing leases consists of the amortization expenses recognized on a straight-line basis over the lease term and interest expense. The Company’s lease agreement for a tool used in the development and marketing of the Company’s technology established a monthly lease payment of $150,000 per month. The lease contains a provision for an annual adjustment of lease payments based on tool availability and usage during the preceding 12 months and the adjusted payment is calculated on August 1 of each year of the lease. Effective August 1, 2022, the lease payments for this tool were reduced to $100,824 per month for the period August 1, 2022 through July 31, 2023. This adjustment to the lease payments resulted in a reduction in the ROU and corresponding lease liability. Effective August 1, 2023, the lease payments for this tool were adjusted to $137,650 per month for the period August 1, 2023 through July 31, 2024. This adjustment to the lease payments also resulted in a reduction in the ROU and corresponding lease liability.

 

Effective May 1, 2023, the Company leased an additional 404 square feet at its Tempe office location under an amendment to its current lease. The monthly rent payment increased from $1,277 per month to $2,365 per month and the increased rent under the amended lease is accounted for as a modification to the lease under ASC 842 at the time of commencement. At the effective date of the lease amendment, a right-of-use asset of approximately $33,000 was recorded along with a short-term operating lease liability of approximately $12,000 and long-term operating lease liability of approximately $21,000. The amended lease ends in February 2026.

 

In December 2022, the Company entered into a lease agreement for a tool in Tempe, Arizona. The term of this lease is for six months beginning on January 1, 2023 with an option to extend the lease for an additional six months. The initial lease terms were $96,000 per month. In March 2023, the Company elected to extend the lease through December 31, 2023 and in consideration for this extension the remaining lease payments were reduced to $84,000. Since the lease and extension are not for more than one year, the future lease payments are not included in the lease obligations on the Company’s condensed balance sheets.

 

The Company terminated its office lease in Cambridge, Massachusetts as of March 31, 2023. The cost of the lease was $2,942 per month.

 

The components of lease costs were as follows (in thousands):

                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Financing lease costs:                    
Amortization of ROU assets  $284   $300   $865   $938 
Interest on lease liabilities   47    60    151    200 
Total financing lease costs  $331   $360   $1,016   $1,138 
                     
Operating lease costs:                    
Fixed lease costs  $66   $62   $192   $186 
Variable lease costs   1    –    1    – 
Short-term lease costs   251    9    792    29 
Total operating lease costs  $318   $71   $985   $215 

 

Future minimum payments under non-cancellable leases as of September 30, 2023 were as follows (in thousands):

        
For the Year Ended December 31,  Financing leases   Operating leases 
Remaining 2023  $329   $39 
2024   1,367    291 
2025   1,436    298 
2026   478    24 
2027 & thereafter   –    – 
Total future minimum lease payments  $3,610   $652 
Less imputed interest   (245)   (42)
Total lease liability  $3,365   $610 

 

The below table provides supplemental information and non-cash activity related to the Company’s operating and financing leases are as follows (in thousands):

                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Operating cash flow information:                    
Cash paid for amounts included in the measurement of operating lease liabilities  $55   $53   $216   $161 
Cash paid for amounts included in the measurement of financing liabilities  $300   $280   $782   $998 
Non-cash activity:                    
Right-of-use assets obtained in exchange for operating lease obligations  $–   $–   $33   $– 
Remeasurement of right-of-use asset and liability in financing lease  $(114)  $(458)  $(114)  $(458)

 

The table above does not include short-term leases that are one-year or less.

  

The weighted average remaining discount rate is 5.48% for the Company’s operating leases and 5.25% for the financing lease. The weighted average remaining lease term is 2.4 years for the Company’s operating leases and 2.8 years for the financing lease.
v3.23.3
STOCK BASED COMPENSATION
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK BASED COMPENSATION

  

8. STOCK BASED COMPENSATION

 

In May 2017, the Company’s shareholders approved its 2017 Stock Incentive Plan (“2017 Plan”) after its 2007 Stock Incentive Plan (“2007 Plan”) had expired in March 2017. The 2017 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock and for the grant of restricted and unrestricted shares. The 2017 Plan provides for the issuance of 3,750,000 shares of common stock. As of September 30, 2023, approximately 25,000 shares remain available for issuance. In May 2023, the Company’s shareholders approved its 2023 Stock Incentive Plan (“2023 Plan”). The 2023 plan provides for the issuance of 2,000,000 shares of common stock. All employees and employees of any subsidiary (including officers and directors who are also employees), as well as all of the nonemployee directors and other consultants, advisors and other persons who provide services to the Company are eligible to receive incentive awards under the 2017 Plan and 2023 Plan. Generally, stock options and restricted stock issued under the 2017 Plan and 2023 Plan vest over a period of one to four years from the date of grant. As of September 30, 2023, approximately 1.9 million shares remain available for issuance.

 

The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and nine months ended September 30, 2023 and 2022 for stock options and restricted stock granted under the Company’s incentive plans (in thousands):

                
  

Three Months Ended

September 30,

   Nine Months Ended
September 30,		 
   2023   2022   2023   2022 
Research and development  $364   $305   $1,064   $844 
General and administrative   588    518    1,683    1,446 
Selling and Marketing   89    66    251    184 
Total  $1,041   $889   $2,998   $2,474 

 

As of September 30, 2023, there was approximately $7.6 million of total unrecognized compensation expense related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 2.6 years.

 

The weighted average grant date fair value per share of the options granted under the Company’s Plans were $4.68 and $4.94 for the three and nine months ended September 30, 2023, respectively. The weighted average grant date fair value per share of the options granted under the Company’s Plans were $8.48 and $10.37 for the three and nine months ended September 30, 2022, respectively.

 

The following table summarizes stock option activity during the nine months ended September 30, 2023 (in thousands except exercise prices and contractual terms):

                
  

Number of

Shares

  

Weighted-

Average

Exercise

Prices per Share

  

Weighted-
Average

Remaining

Contractual

Term (In Years)

   Intrinsic
Value		 
Outstanding at January 1, 2023   3,009   $7.07           
Granted   391   $6.54           
Exercised   (30)  $3.90           
Outstanding at September 30, 2023   3,370   $7.03    4.9   $2,234 
Exercisable at September 30, 2023   2,788   $6.60    4.1   $2,087 

 

During the nine months ended September 30, 2023, the Company granted options under the 2017 Plan to purchase approximately 391,000 shares of its common stock to its employees and consultants. The fair value of these options was approximately $2.0 million at the time of grant.

 

The Company issues restricted stock to employees, directors and consultants and estimates the fair value based on the closing price on the day of grant. The following table summarizes all restricted stock activity during the nine months ended September 30, 2023 (in thousands except per share data):

        
  

Number of

Shares

  

Weighted-Average

Grant Date Fair Value per Share

 
Outstanding at January 1, 2023   340   $10.78 
Granted   357   $7.00 
Forfeited   (20)  $8.63 
Vested   (196)  $8.63 
Outstanding non-vested shares at September 30, 2023   481   $8.94 

 

During the nine months ended September 30, 2023, the Company granted approximately 357,000 restricted stock awards under the 2017 and 2023 Plans. The fair value of these awards was approximately $2.5 million at the time of grant.
v3.23.3
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

  

9. COMMITMENTS AND CONTINGENCIES

 

Litigation, Claims and Assessments

 

The Company may be subject to periodic lawsuits, investigations and claims that arise in the ordinary course of business. The Company is not party to any material litigation as of September 30, 2023, or through the date these financial statements have been issued.
v3.23.3
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

  

10. SUBSEQUENT EVENTS

 

Management has evaluated subsequent events and transactions through the date these financial statements were issued.

 

Since September 30, 2023, the Company has issued approximately 15,000 additional shares through its ATM offering at an average price per share of $7.13 resulting in additional net proceeds of approximately $104,000.

 
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Significant accounting policies

Significant accounting policies

 

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 15, 2023.

 
Basis of presentation of unaudited condensed financial information

Basis of presentation of unaudited condensed financial information

 

The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and its results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2023. These unaudited condensed financial statements should be read in conjunction with that report.

 
Cash, cash equivalents, and short-term investments

Cash, cash equivalents, and short-term investments

 

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds or U.S. agency bonds. Cash and cash equivalents are carried at cost, which approximates their fair value.

 

The Company's portfolio of short-term investments is comprised solely of U.S. treasury bills and agency bonds with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss).

 

Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.

 
Adoption of recent accounting standards

Adoption of recent accounting standards

 

From time to time, new accounting standards are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. No new accounting standards, issued or effective during the period ended September 30, 2023, have had or are expected to have a significant impact on the Company’s financial statements.

 
v3.23.3
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule fair value measurements
                        
       September 30, 2023   December 31, 2022 
   Cost   Unrealized Gain/(Loss)   Accretion of Discount   Fair Value   Cost   Fair Value 
Cash  $–   $–   $–   $–   $1   $1 
Money market funds   11,649    –    –    11,649    21,183    21,183 
US treasury bills   4,902    (1)   61    4,962    –    – 
US agency bonds   3,763    (2)   17    3,778    –    – 
Total  $20,314   $(3)  $78   $20,389   $21,184   $21,184 
v3.23.3
REVENUE (Tables)
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of disaggregated revenue and timing of revenue
                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Primary geographic markets                    
North America  $–   $2   $–   $77 
Asia Pacific   –    –    –    300 
Total  $–   $2   $–   $377 
                     
Timing of revenue recognition                    
Products and services transferred at a point in time  $–   $–   $–   $375 
Products and services transferred over time   –    2    –    2 
Total  $–   $2   $–   $377 
v3.23.3
BASIC AND DILUTED LOSS PER SHARE (Tables)
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Schedule of anti dilutive shares
        
  

Nine Months Ended

September 30,

 
   2023   2022 
Stock Options   3,370    3,019 
Unvested restricted stock   481    403 
Total   3,851    3,422 
v3.23.3
LEASES (Tables)
 9 Months Ended
Sep. 30, 2023
Leases  
Schedule components of lease costs
                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Financing lease costs:                    
Amortization of ROU assets  $284   $300   $865   $938 
Interest on lease liabilities   47    60    151    200 
Total financing lease costs  $331   $360   $1,016   $1,138 
                     
Operating lease costs:                    
Fixed lease costs  $66   $62   $192   $186 
Variable lease costs   1    –    1    – 
Short-term lease costs   251    9    792    29 
Total operating lease costs  $318   $71   $985   $215 
Schedule of future minimum lease payments
        
For the Year Ended December 31,  Financing leases   Operating leases 
Remaining 2023  $329   $39 
2024   1,367    291 
2025   1,436    298 
2026   478    24 
2027 & thereafter   –    – 
Total future minimum lease payments  $3,610   $652 
Less imputed interest   (245)   (42)
Total lease liability  $3,365   $610 
Supplemental non-cash activity related to operating and financing leases
                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Operating cash flow information:                    
Cash paid for amounts included in the measurement of operating lease liabilities  $55   $53   $216   $161 
Cash paid for amounts included in the measurement of financing liabilities  $300   $280   $782   $998 
Non-cash activity:                    
Right-of-use assets obtained in exchange for operating lease obligations  $–   $–   $33   $– 
Remeasurement of right-of-use asset and liability in financing lease  $(114)  $(458)  $(114)  $(458)
v3.23.3
STOCK BASED COMPENSATION (Tables)
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of stock-based compensation expense
                
  

Three Months Ended

September 30,

   Nine Months Ended
September 30,		 
   2023   2022   2023   2022 
Research and development  $364   $305   $1,064   $844 
General and administrative   588    518    1,683    1,446 
Selling and Marketing   89    66    251    184 
Total  $1,041   $889   $2,998   $2,474 
Schedule of stock option activity
                
  

Number of

Shares

  

Weighted-

Average

Exercise

Prices per Share

  

Weighted-
Average

Remaining

Contractual

Term (In Years)

   Intrinsic
Value		 
Outstanding at January 1, 2023   3,009   $7.07           
Granted   391   $6.54           
Exercised   (30)  $3.90           
Outstanding at September 30, 2023   3,370   $7.03    4.9   $2,234 
Exercisable at September 30, 2023   2,788   $6.60    4.1   $2,087 
Schedule of restricted stock option activity
        
  

Number of

Shares

  

Weighted-Average

Grant Date Fair Value per Share

 
Outstanding at January 1, 2023   340   $10.78 
Granted   357   $7.00 
Forfeited   (20)  $8.63 
Vested   (196)  $8.63 
Outstanding non-vested shares at September 30, 2023   481   $8.94 
v3.23.3
LIQUIDITY AND MANAGEMENT PLANS (Details Narrative)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Subsidiary, Sale of Stock [Line Items]    
Cash, cash equivalents and short-term investments $ 20,400,000 $ 20,400,000
Working capital $ 17,900,000 $ 17,900,000
ATM Facility [Member]    
Subsidiary, Sale of Stock [Line Items]    
Sale of stock, shares | shares 24,000 1,400,000
Average price per share | $ / shares $ 9.17 $ 8.11
Proceeds from sale of stock, value $ 185,000 $ 11,200,000
v3.23.3
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 1 [Member] - Fair Value, Recurring [Member] - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost $ 20,314 $ 21,184
Unrealized Gain/(Loss) (3)  
Accretion of Discount 78  
Fair Value 20,389 21,184
Cash [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 0 1
Unrealized Gain/(Loss) 0  
Accretion of Discount 0  
Fair Value 0 1
Money Market Funds [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 11,649 21,183
Unrealized Gain/(Loss) 0  
Accretion of Discount 0  
Fair Value 11,649 21,183
U S Treasury Bills [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 4,902 0
Unrealized Gain/(Loss) (1)  
Accretion of Discount 61  
Fair Value 4,962 0
U S Agency Bonds [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 3,763 0
Unrealized Gain/(Loss) (2)  
Accretion of Discount 17  
Fair Value $ 3,778 $ 0
v3.23.3
REVENUE (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenue $ 0 $ 2 $ 0 $ 377
Transferred at Point in Time [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 0 0 0 375
Transferred over Time [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 0 2 0 2
North America [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 0 2 0 77
Asia Pacific [Member]        
Disaggregation of Revenue [Line Items]        
Revenue $ 0 $ 0 $ 0 $ 300
v3.23.3
BASIC AND DILUTED LOSS PER SHARE (Details) - shares
shares in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Anti dilutive shares 3,851 3,422
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Anti dilutive shares 3,370 3,019
Unvested Restricted Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Anti dilutive shares 481 403
v3.23.3
LEASES (Details - Lease costs) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Financing lease costs:        
Amortization of ROU assets $ 284 $ 300 $ 865 $ 938
Interest on lease liabilities 47 60 151 200
Total financing lease costs 331 360 1,016 1,138
Operating lease costs:        
Fixed lease costs 66 62 192 186
Variable lease costs 1 0 1 0
Short-term lease costs 251 9 792 29
Total operating lease costs $ 318 $ 71 $ 985 $ 215
v3.23.3
LEASES (Details - Minimum lease payments)
$ in Thousands
Sep. 30, 2023
USD ($)
Operating Leases [Member]  
Debt Instrument [Line Items]  
Remaining 2023 $ 39
2024 291
2025 298
2026 24
2027 & thereafter 0
Total future minimum lease payments 652
Less imputed interest (42)
Total lease liability 610
Financing Leases [Member]  
Debt Instrument [Line Items]  
Remaining 2023 329
2024 1,367
2025 1,436
2026 478
2027 & thereafter 0
Total future minimum lease payments 3,610
Less imputed interest (245)
Total lease liability $ 3,365
v3.23.3
LEASES (Details - Cash flow effect) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Operating cash flow information:        
Cash paid for amounts included in the measurement of operating lease liabilities $ 55 $ 53 $ 216 $ 161
Cash paid for amounts included in the measurement of financing liabilities 300 280 782 998
Non-cash activity:        
Right-of-use assets obtained in exchange for operating lease obligations 0 0 33 0
Remeasurement of right-of-use asset and liability in financing lease $ (114) $ (458) $ (114) $ (458)
v3.23.3
LEASES (Details Narrative) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
May 01, 2023
Dec. 31, 2022
Right-of-use asset $ 574   $ 700
Short-term operating lease liability 262   245
Long-term operating lease liability $ 348   $ 521
Lessee, operating lease, terminate description The Company terminated its office lease in Cambridge, Massachusetts as of March 31, 2023. The cost of the lease was $2,942 per month.    
Operating lease, weighted average discount rate 5.48%    
Financing lease, weighted average discount rate 5.25%    
Operating lease, weighted average lease term 2 years 4 months 24 days    
Financing lease, weighted average lease term 2 years 9 months 18 days    
Tempe Office [Member]      
Right-of-use asset   $ 33  
Short-term operating lease liability   12  
Long-term operating lease liability   $ 21  
v3.23.3
STOCK BASED COMPENSATION (Details - Compensation Expense) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation $ 1,041 $ 889 $ 2,998 $ 2,474
Research and Development Expense [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation 364 305 1,064 844
General and Administrative Expense [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation 588 518 1,683 1,446
Selling And Marketing [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation $ 89 $ 66 $ 251 $ 184
v3.23.3
STOCK BASED COMPENSATION (Details - Stock Option Activity) - Equity Option [Member] - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 9 Months Ended
Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of shares outstanding, Beginning balance 3,009
Weighted average exercise prices per share, Beginning balance $ 7.07
Number of shares, Granted 391
Weighted average exercise prices per share, Granted $ 6.54
Number of shares, Exercised (30)
Weighted average exercise prices per share, Exercised $ 3.90
Number of shares outstanding, Ending balance 3,370
Weighted average exercise prices per share, Ending balance $ 7.03
Weighted average remaining contractual term, Outstanding 4 years 10 months 24 days
Intrinsic value outstanding, Ending balance $ 2,234
Number of shares, Exercisable 2,788
Weighted average exercise prices per share, Exercisable $ 6.60
Weighted average remaining contractual term, Exercisable 4 years 1 month 6 days
Intrinsic value, Exercisable $ 2,087
v3.23.3
STOCK BASED COMPENSATION (Details - Restricted stock) - Restricted Stock [Member]
shares in Thousands
 9 Months Ended
Sep. 30, 2023
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of shares outstanding, Beginning balance | shares 340
Weighted average grant date fair value per share outstanding, Beginning balance | $ / shares $ 10.78
Number of shares, Granted | shares 357
Weighted average grant date fair value per share, Granted | $ / shares $ 7.00
Number of shares, Forfeited | shares (20)
Weighted average grant date fair value per share, Forfeited | $ / shares $ 8.63
Number of shares, Vested | shares (196)
Weighted average grant date fair value per share, Vested | $ / shares $ 8.63
Number of shares outstanding, Ending balance | shares 481
Weighted average grant date fair value per share outstanding, Ending balance | $ / shares $ 8.94
v3.23.3
STOCK BASED COMPENSATION (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Shares remaining, available for issuance 1,900,000   1,900,000  
Equity Option [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Unrecognized compensation expense $ 7,600,000   $ 7,600,000  
Unrecognized compensation weighted average period     2 years 7 months 6 days  
Options granted     391,000  
Restricted Stock [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Restricted stock granted     357,000  
Restricted Stock [Member] | Employees And Directors [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Fair value of options granted     $ 2,500,000  
Restricted stock granted     357,000  
Plan 2017 [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Shares authorized for issuance 3,750,000   3,750,000  
Shares remaining, available for issuance 25,000   25,000  
Plan 2017 [Member] | Equity Option [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Weighted average grant date fair value per share $ 4.68 $ 8.48 $ 4.94 $ 10.37
Options granted     391,000  
Fair value of options granted     $ 2,000,000  
Plan 2023 [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Shares authorized for issuance 2,000,000   2,000,000  
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