Atomera Inc
For the period ended Dec 31, 2024. Filed Mar 4, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 4, 2025
ATOM$3.01+15.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0001683168-24-001031
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-04.
0001683168-25-001330
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 39 previous paragraphs and 40 current paragraphs.
16 unchanged; 21 reworded; 2 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
***Revenues.***To date, we have only generated limited revenue from customer engagements for engineering services, integration license agreements, an R&D license granted under a JDA, our license agreement with ST 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 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 or yearly basis and revenue is recognized over time.
Current report
For the years ended December 31, 2024 and 2023, we incurred approximately $11.0 million and $12.5 million, respectively, of research and development expense, a decrease of approximately $1.5 million, or 12%. This decrease was primarily due to a decline of approximately $1.6 million in outsourced research and development as we discontinued working with TSI Semiconductor as of January 31, 2024.
Removed paragraphs (2)
Previous report
***Revenues.***To date, we have only generated limited revenue. In the future, we expect to collect increased fees from license agreements and JDAs as well as royalties from customer sales of products that incorporate our MST technology, subject to our ability (i) to enter into manufacturing and distribution license agreements with our current and future licensees and (ii) to advance such licensees, including ST, through licensing phases to royalty-bearing product shipments.
Previous report
For the years ended December 31, 2023 and 2022, we incurred approximately $12.5 million and $10.0 million, respectively, of research and development expense, an increase of approximately $2.5 million, or 25%. The increase was primarily due to outsourced research and development costs, which increased by approximately $1.1 million due to price increases and a higher number of wafers processed. The other main factors that drove the increase in research and development expenses were increases of approximately $739,000 in employee costs reflecting new hires and an increase in the annual bonus accrual, an approximately $255,000 increase in stock-based compensation expense and an increase of approximately $266,000 in technical consulting expenses.
Reworded paragraphs (21)
Previous wording
We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $530+ 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 machines commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits.
Current wording
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 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 machines commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits.
Previous wording
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:
Current wording
We do not 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:
Previous wording
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 aggregate offering proceeds of up to $50.0 million in an “at-the-market” or ATM offering, to or through the agents. During the year ended December 31, 2022, approximately 527,000 shares were sold at an average price per share of approximately $11.68, resulting in approximately $5.8 million of net proceeds to us after deducting commissions and other offering expenses. During the year ended December 31, 2023, approximately 1.8 million shares were sold at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses.
Current wording
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 aggregate offering proceeds of up to $50.0 million in an “at-the-market” or ATM offering, to or through the agents. During the year ended December 31, 2023, we sold approximately 1.8 million shares at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses. During the year ended December 31, 2024, we sold approximately 4.1 million shares at an average price per share of approximately $5.38, resulting in approximately $21.3 million of net proceeds to us after deducting commissions and other offering expenses.
Previous wording
Our integration 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 to date grant the licensees the right to build products that integrate our MST technology deposited by us onto their semiconductor wafers, but these agreements do not grant the licensees the rights to manufacture on their site 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 upon delivery of 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. Our license agreement with ST, which we executed in April 2023, was our first full commercial license agreement and provided for grants of a manufacturing license enabling ST to install MST in a tool in their fab and to manufacture wafers for internal development use only as well as a distribution license granted upon completion of process qualification. The ST license agreement provides for payments of license fees, payable upon reaching milestones for MST installation and acceptance, in the case of the manufacturing license, and upon reaching process qualification milestones. After process qualification is complete and associated payments are made, ST will be required to pay royalties for all products they sell that utilize MST.
Current wording
Our integration 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 to date grant the licensees the right to build products that integrate our MST technology deposited by us onto their semiconductor wafers, but these agreements do not grant the licensees the rights to manufacture on their site or to sell products incorporating MST. Our first JDA included the grant of an R&D license to our customer and we were paid for such license upon delivery of 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. Our license agreement with ST, which we executed in April 2023, was our first full commercial license agreement and provided for grants of a license enabling ST to install MST in a tool in their fab and to manufacture wafers for internal development use only as well as an HVM license granted upon completion of process qualification. The ST license agreement provides for payments of license fees, payable upon reaching milestones for MST installation and acceptance, in the case of the R&D license, and upon reaching process qualification milestones. After process qualification is complete and associated payments are made, ST will obtain an HVM license and will be required to pay royalties for all products they sell that utilize MST.
Previous wording
Revenue for the years ended December 31, 2023 and 2022 was approximately $550,000 and $382,000, respectively. Our revenue for 2023 consisted of revenue from a manufacturing license. Our revenue for 2022 consisted of a success fee pursuant to our JDA, a license fee paid under an integration license agreement and MSTcad license revenue.
Current wording
Revenue for the years ended December 31, 2024 and 2023 was approximately $135,000 and $550,000, respectively. Our revenue in 2024 consisted of MSTcad licensing and related consulting services revenue, and engineering services revenue from the delivery of MST wafers. Our revenue for 2023 consisted of revenue from a manufacturing license.
Previous wording
***Cost of Revenue.***Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration engineering services, support for customer installation and qualification and MSTcad support. Cost of revenue was approximately $28,000 and $81,000 for the years ended December 31, 2023 and 2022, 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.
Current wording
***Cost of Revenue.***Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration engineering services, support for customer installation and qualification and MSTcad support. Cost of revenue was approximately $123,000 and $28,000 for the years ended December 31, 2024 and 2023, 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.
Previous wording
***Operating Expenses.***Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the years ended December 31, 2023 and 2022 our operating expenses totaled approximately $21.2 million and $17.8 million, respectively.
Current wording
***Operating Expenses.***Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the years ended December 31, 2024 and 2023, our operating expenses totaled approximately $19.3 million and $21.2 million, respectively.
Previous wording
***Research and development expenses.***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 benefit costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology.
Current wording
***Research and development expenses.***To date, our operations have focused on the research, development, and commercialization of our MST technology and related technologies such as MSTcad. Our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology.
Previous wording
***General and administrative expenses.***General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees. General and administrative costs for the years ended December 31, 2023 and 2022 were approximately $7.1 million and $6.4 million, respectively, representing an increase of approximately $634,000, or 10%. The increase in costs was primarily due to an increase in employee-related costs of approximately $166,000, an increase of approximately $116,000 in patent fees and legal fees associated with our patents, an increase of approximately $100,000 in other legal fees and an increase of approximately $301,000 in stock-based compensation expense.
Current wording
***General and administrative expenses.***General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees. General and administrative costs for the years ended December 31, 2024 and 2023 were approximately $7.3 million and $7.1 million, respectively, representing an increase of approximately $191,000, or 3%. The increase in costs was primarily due to an increase in employee-related costs of approximately $136,000 and an increase of approximately $332,000 in patent fees and legal fees associated with our patents. These costs were partially offset by a decrease of approximately $144,000 in stock-based compensation and approximately $90,000 in corporate legal expenses.
Previous wording
***Selling and marketing expenses.***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 years ended December 31, 2023 and 2022 were approximately $1.6 million and $1.3 million, respectively, representing an increase of approximately $251,000, or 19%. The increase in costs is primarily related to increased spending on employee-related costs of approximately $72,000, an increase in stock-based compensation of approximately $91,000 and an increase of approximately $62,000 in travel-related expenses.
Current wording
***Selling and marketing expenses.***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 years ended December 31, 2024 and 2023 were approximately $1.1 million and $1.6 million, respectively, representing a decrease of approximately $546,000, or 34%. The decrease in costs is primarily related to a reduction in headcount which decreased employee related costs, stock-based compensation and travel expenses.
Previous wording
***Interest income.***Interest income for the years ended December 31, 2023 and 2022 was approximately $723,000 and $340,000, respectively. Interest income for each period related to interest earned on our cash and cash equivalents and the increase was primarily due to progressively higher interest rates during these periods.
Current wording
***Interest income.***Interest income for the years ended December 31, 2024 and 2023 was approximately $779,000 and $723,000, respectively. Interest income for each period related to interest earned on our cash and cash equivalents and the increase was primarily due to progressively higher interest rates and cash balances during these periods.
Previous wording
Accretion income. Accretion income for the year ended December 31, 2023 was approximately $283,000. 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 year ended December 31, 2022 because our active cash management program, which involves investment of a portion of our cash in short-term fixed-income securities commenced in the first quarter of 2023.
Current wording
Accretion income. Accretion income for the years ended December 31, 2024 and 2023 was approximately $178,000 and $283,000, respectively. Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date.
Previous wording
Other income/expense, net. Other income for the year December 31, 2023 of approximately $75,000, consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services. There was no other income/expenses for the year ended December 31, 2022.
Current wording
Other income/expense, net. Other income for the years December 31, 2024 and 2023 was approximately $73,000 and $75,000, respectively. Other income consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services for both years.
Previous wording
***Interest expense.***Interest expense for the years ended December 31, 2023 and 2022 was approximately $194,000 and $255,000, respectively. Interest expense is related to the tool financing lease entered into in August 2021.
Current wording
***Interest expense.***Interest expense for the years ended December 31, 2024 and 2023 was approximately $129,000 and $194,000, respectively. Interest expense is related to the tool financing lease entered into in August 2021.
Previous wording
As of December 31, 2023, we had cash, cash equivalents and short-term investments of approximately $19.5 million and working capital of approximately $16.6 million. For the year ended December 31, 2023, we had a net loss of approximately $19.8 million and used approximately $14.6 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.
Current wording
As of December 31, 2024, we had cash, cash equivalents and short-term investments of approximately $26.8 million and working capital of approximately $23.5 million. For the year ended December 31, 2024, we had a net loss of approximately $18.4 million and used approximately $13.2 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.
Previous wording
During the year ended December 31, 2023, we sold approximately 1.8 million shares pursuant to our ATM at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses.
Current wording
During the year ended December 31, 2024, we sold approximately 4.1 million shares pursuant to our ATM at an average price per share of approximately $5.38, resulting in approximately $21.3 million of net proceeds to us after deducting commissions and other offering expenses.
Previous wording
Net cash used in operating activities of approximately $12.5 million for year ended December 31, 2022 resulted primarily from our net loss of approximately $17.4 million, adjusted by approximately $3.4 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.4 million.
Current wording
Net cash used in operating activities of approximately $13.2 million for year ended December 31, 2024 resulted primarily from our net loss of approximately $18.4 million, adjusted by approximately $3.9 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.3 million.
Previous wording
Net cash used in investing activities of approximately $6.8 million and for year ended December 31, 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 by investing activities of approximately $39,000 for the year ended December 31, 2022, consisted of the purchase of computers and lab tools for our Tempe office space.
Current wording
Net cash used in investing activities of approximately $6.8 million and for year ended December 31, 2023 consisted primarily of the purchase of short-term available-for-sale investments, offset by the maturity of short-term available-for-sale investments.
Previous wording
Net cash provided by financing activities of approximately $5.0 million for the year ended December 31, 2022 related primarily to net proceeds from our ATM Facility during the year ended December 31, 2022, offset in part by approximately $984,000 in principal payments on our financing lease.
Current wording
Net cash provided by financing activities of approximately $20.3 million for the year ended December 31, 2024 related primarily to net proceeds from our ATM Facility, offset in part by approximately $1.1 million in principal payments on our financing lease.
Previous wording
Net cash provided by financing activities of approximately $12.7 million for the year ended December 31, 2023 related primarily to net proceeds from our ATM Facility during the year ended December 31, 2023, offset in part by approximately $918,000 in principal payments on our financing lease.
Current wording
Net cash provided by financing activities of approximately $12.7 million for the year ended December 31, 2023 related primarily to net proceeds from our ATM Facility, offset in part by approximately $918,000 in principal payments on our financing lease.
Previous wording
We account for leases in accordance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2016-02,Leases(Topic 842). We determine if a contract contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent its right to use an underlying asset for the lease term while lease liabilities represent its obligation to make lease payments arising from the lease. All leases greater than 12 months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Lease expenses for operating leases is recognized on a straight-line-basis over the lease term. Lease expenses for financing leases is amortization of the ROU assets over the life of the lease and interest expense is recognized on the liability.
Current wording
We account for leases in accordance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2016-02,Leases(Topic 842). We determine if a contract contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases greater than 12 months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Lease expenses for operating leases is recognized on a straight-line-basis over the lease term. Lease expenses for financing leases consists of amortization of the ROU assets over the life of the lease and interest expense is recognized on the liability.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash provided in investing activities of approximately $6.1 million and for year ended December 31, 2024 consisted primarily of the maturity of short-term available-for-sale investments, offset by the purchase of short-term available-for-sale investments.