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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, 2024.

 

or

 

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

For the transition period from __________ to __________

 

Commission file number: 001-37850

 

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 29, 2024 was 28,778,128.

 

   

 

 

Atomera Incorporated

 

Index

 

    Page
PART I. Financial Information  
     
Item 1. Financial Statements 3
     
  Condensed Balance Sheets – September 30, 2024 (Unaudited) and December 31, 2023 3
     
  Unaudited Condensed Statements of Operations – For the Three and Nine Months Ended September 30, 2024 and 2023 4
     
  Unaudited Condensed Statements of Comprehensive Loss – For the Three and Nine Months Ended September 30, 2024 and 2023 5
     
  Unaudited Condensed Statements of Stockholders’ Equity – For the Three and Nine Months Ended September 30, 2024 and 2023 6
     
  Unaudited Condensed Statements of Cash Flows – For the Nine Months Ended September 30, 2024 and 2023 7
     
  Notes to the Unaudited Condensed Financial Statements 8
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 19
     
Item 4. Controls and Procedures 19
     
PART II. Other Information  
   
Item 1A. Risk Factors 20
     
Item 5. Other Information 20
     
Item 6. Exhibits 20
     
Signatures 21

 

 

 2 

 

 

PART I. Financial Information

Item 1. Financial Statements

 

Atomera Incorporated

Condensed Balance Sheets

(in thousands, except per share data)

 

           
   September 30,   December 31, 
   2024   2023 
   (Unaudited)     
ASSETS          
           
Current assets:          
Cash and cash equivalents  $13,757   $12,591 
Short-term investments   3,585    6,940 
Accounts receivable   6    – 
Unbilled contracts receivable   –    550 
Interest receivable   56    79 
Prepaid expenses and other current assets   388    244 
Total current assets   17,792    20,404 
           
Property and equipment, net   63    100 
Long-term prepaid maintenance and supplies   91    91 
Security deposit   14    14 
Operating lease right-of-use asset   341    517 
Financing lease right-of-use-asset   1,839    2,903 
           
Total assets  $20,140   $24,029 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current liabilities:          
Accounts payable  $786   $618 
Accrued expenses   172    222 
Accrued payroll related expenses   968    1,382 
Current operating lease liability   258    264 
Current financing lease liability   1,194    1,328 
Deferred revenue   8    – 
Total current liabilities   3,386    3,814 
           
Long-term operating lease liability   80    295 
Long-term financing lease liability   781    1,750 
           
Total liabilities   4,247    5,859 
           
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, 2024 and December 31, 2023   –    – 
Common stock: $0.001 par value, authorized 47,500 shares; 28,289 shares issued and outstanding as of September 30, 2024; and 26,107 shares issued and outstanding as of December 31, 2023   28    26 
Additional paid in capital   232,726    221,229 
Other comprehensive income   2    – 
Accumulated deficit   (216,863)   (203,085)
Total stockholders’ equity   15,893    18,170 
Total liabilities and stockholders’ equity  $20,140   $24,029 

 

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,

 
   2024   2023   2024   2023 
Revenue  $22   $–   $112   $– 
Cost of revenue   (3)   –    (110)   – 
Gross margin   19    –    2    – 
                     
Operating expenses                    
Research and development   2,759    3,305    8,206    9,533 
General and administrative   1,812    1,683    5,455    5,200 
Selling and marketing   248    365    805    1,147 
Total operating expenses   4,819    5,353    14,466    15,880 
                     
Loss from operations   (4,800)   (5,353)   (14,464)   (15,880)
                     
Other income (expense)                    
Interest income   176    177    566    528 
Accretion income   59    112    152    221 
Interest expense   (30)   (47)   (104)   (151)
Other income, net   –    72    72    72 
Total other income (expense), net   205    314    686    670 
                     
Net loss  $(4,595)  $(5,039)  $(13,778)  $(15,210)
                     
Net loss per common share, basic  $(0.17)  $(0.20)  $(0.52)  $(0.62)
Net loss per common share, diluted  $(0.17)  $(0.20)  $(0.52)  $(0.62)
                     
Weighted average number of common shares
outstanding, basic		   27,406    25,255    26,640    24,536 
Weighted average number of common shares
outstanding, diluted		   27,406    25,255    26,640    24,536 

 

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,

 
   2024   2023   2024   2023 
Net loss  $(4,595)  $(5,039)  $(13,778)  $(15,210)
Unrealized gain (loss) on available-for-sale securities   9    (1)   2    (3)
Net loss  $(4,586)  $(5,040)  $(13,776)  $(15,213)

 

 

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, 2024 and 2023

(Unaudited)

(in thousands)

 

                         
   Common Stock   Additional
Paid-in		   Other
Comprehensive		   Accumulated   Total
Stockholders’		 
   Shares   Amount   Capital   Loss   Deficit   Equity 
Balance January 1, 2024   26,107   $26   $221,229   $–   $(203,085)  $18,170 
Stock-based compensation   275    –    1,024    –    –    1,024 
Stock option exercise   13    –    86    –    –    86 
Forfeiture of restricted stock issuance   (20)   –    –    –    –    – 
At-the-market sale of stock, net of commissions and expenses   510    1    3,949    –    –    3,950 
Net loss   –    –    –    –    (4,822)   (4,822)
Unrealized gain (loss) on available-for-sale securities   –    –    –    (1)   –    (1)
Balance March 31, 2024   26,885   $27   $226,288   $(1)  $(207,907)  $18,407 
Stock-based compensation   65    –    987    –    –    987 
Forfeiture of restricted stock issuance   (11)   –    –    –    –    – 
At-the-market sale of stock, net of commissions and expenses   669    1    2,441    –    –    2,442 
Other sale   2    –    10    –    –    10 
Net loss   –    –    –    –    (4,361)   (4,361)
Unrealized gain (loss) on available-for-sale securities   –    –    –    (6)   –    (6)
Balance June 30, 2024   27,610   $28   $229,726   $(7)  $(212,268)  $17,479 
Stock-based compensation        –    907    –    –    907 
Forfeiture of restricted stock issuances   (12)   –    –    –    –      
At-the-market sale of stock, net of commissions and expenses   691    –    2,093    –    –    2,093 
Net loss   –    –    –    –    (4,595)   (4,595)
Unrealized gain (loss) on available-for-sale securities   –    –    –    9    –    9 
Balance September 30, 2024   28,289   $28   $232,726   $2   $(216,863)  $15,893 

 

 

   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)

 

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,		 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Loss  $(13,778)  $(15,210)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   42    60 
Operating lease right of use asset amortization   176    159 
Financing lease right of use asset amortization   823    865 
Stock-based compensation   2,918    2,998 
Net accretion of discounts on available-for-sale securities   (135)   (198)
Changes in operating assets and liabilities:          
Accounts receivable   (6)   – 
Unbilled contracts receivable   550    – 
Interest receivable   34    (13)
Prepaid and other current assets   (144)   26 
Accounts payable   (11)   65 
Accrued expenses   (50)   57 
Accrued payroll expenses   (414)   (269)
Operating lease liability   (221)   (189)
Deferred revenue   8    – 
Net cash used in operating activities   (10,208)   (11,649)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Acquisition of property and equipment   (6)   (31)
Purchase of available-for-sale securities   (5,268)   (16,595)
Maturity of available-for-sale securities   8,750    9,000 
Net cash provided by/(used in) investing activities   3,476    (7,626)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from at-the-market sale of stock, net of commissions and expenses   8,485    11,248 
Proceeds from exercise of stock options   86    117 
Proceeds from stock sale   10    – 
Payments on principal of financing lease   (683)   (632)
Net cash provided by financing activities   7,898    10,733 
           
Net increase/(decrease) in cash and cash equivalents   1,166    (8,542)
           
Cash and cash equivalents at beginning of period   12,591    21,184 
           
Cash and cash equivalents at end of period  $13,757   $12,642 
           
Supplemental information:          
Cash paid for interest  $85   $151 
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, 2024

 

 

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 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, 2024, the Company had cash, cash equivalents and short-term investments of approximately $17.3 million and working capital of approximately $14.4 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 initial organization, financing, expenditures, and scaling of a new business that is not generating positive cashflow.

 

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 agents, having aggregate offering proceeds of up to $50.0 million (the “ATM”). During the three-month period ended September 30, 2024, the Company sold approximately 691,000 shares pursuant to the ATM at an average price per share of approximately $3.18, resulting in approximately $2.1 million of net proceeds to the Company after deducting commissions and other offering expenses. During the nine-month period ended September 30, 2024, the Company sold approximately 1.9 million shares pursuant to the ATM at an average price per share of approximately $4.74, resulting in approximately $8.5 million of net proceeds to the Company after deducting commissions and other offering expenses. As of September 30, 2024, the Company has a remaining capacity on the ATM of approximately $20.9 million.

 

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.  

 

  

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, 2024.

 

 

 

 

 8 

 

 

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, 2024 and 2023 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, 2023 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2024. 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 condensed balance sheets 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, net in the condensed statements of operations when incurred. Unrealized gains and losses are included in other comprehensive income (loss) on the condensed balance sheets.

 

Recent Accounting Standards

 

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories included in each reported measure of a segment's profit or loss on an interim and annual basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The update should be applied retrospectively to all prior periods presented in the financial statements. The Company has not yet adopted this update and is does not expect this new standard will have on its financial position and results of operations.

 

  

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.

 

 

 9 

 

 

The Company’s cash equivalents and short-term investments 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, 2024 and December 31, 2023 consisted of the following (in thousands):

                
   September 30, 2024 
   Cost   Unrealized Gain/(Loss)   Accretion of Discount   Fair Value 
Cash  $22   $–   $–   $22 
Money market funds   13,735    –    –    13,735 
US agency bonds   3,539    2    44    3,585 
Total  $17,296   $2   $44   $17,342 

 

   December 31, 2023 
   Cost   Accretion of Discount   Fair Value 
Cash  $157   $–   $157 
Money market funds   12,434    –    12,434 
US treasury bills   2,931    50    2,981 
US agency bonds   3,938    21    3,959 
Total  $19,460   $71   $19,531 

 

 

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). Revenue from integration license agreements and from MSTcad licenses are recognized over the length of the license.

 

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,

 
   2024   2023   2024   2023 
Primary geographic markets                    
North America  $22   $–   $112   $– 
Asia Pacific   –    –    –    – 
Total  $22   $–   $112   $– 
                     
Timing of revenue recognition                    
Products and services transferred at a point in time  $–   $–   $50   $– 
Products and services transferred over time   22    –    62    – 
Total  $22   $–   $112   $– 

 

 

 10 

 

 

Unbilled contracts receivable

 

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. All unbilled contracts receivable as of December 31, 2023 were billed and received during the nine months ended September 30, 2024.

 

Deferred Revenue

 

The Company records deferred revenue for customers that were issued invoices, but the Company has not yet recognized the revenue based on its revenue recognition policy. As of September 30, 2024, the Company has approximately $8,000 of deferred revenue that it expects to recognize over the next four months.

 

  

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 (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,

 
   2024   2023 
Stock Options   3,779    3,370 
Unvested restricted stock   512    481 
Total   4,291    3,851 

   

  

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, 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 August 1, 2024, the lease payments for this tool were adjusted to $124,071 per month for the period August 1, 2024 through July 31, 2025. 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.

 

 

 11 

 

 

In December 2023, the Company entered into a lease agreement for a tool in Tempe, Arizona. The term of this lease is for 12 months beginning on January 1, 2024 for $87,000 per month. Since the lease term is not for more than one year and there are no extension provisions in the lease, 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,

 
   2024   2023   2024   2023 
Financing lease costs:                    
Amortization of ROU assets  $261   $284   $823   $865 
Interest on lease liabilities   30    47    104    151 
Total financing lease costs  $291   $331   $927   $1,016 
                     
Operating lease costs:                    
Fixed lease costs  $65   $66   $196   $192 
Variable lease costs   1    1    1    1 
Short-term lease costs   261    251    783    792 
Total operating lease costs  $327   $318   $980   $985 

  

Future minimum payments under non-cancellable leases as of September 30, 2024 were as follows (in thousands):

        
For the Year Ended December 31,  Financing leases   Operating leases 
Remaining 2024  $297   $40 
2025   1,291    288 
2026   478    24 
Total future minimum lease payments   2,066    352 
Less imputed interest   (91)   (14)
Total lease liability  $1,975   $338 

 

The table below 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,

 
   2024   2023   2024   2023 
Operating cash flow information:                    
Cash paid for amounts included in the measurement of operating lease liabilities  $60   $55   $241   $216 
Cash paid for amounts included in the measurement of financing liabilities  $219   $300   $768   $782 
Non-cash activity:                    
Right-of-use assets obtained in exchange for operating lease obligations  $–   $–   $–   $33 
Remeasurement of right-of-use assets and liability in financing lease  $(241)  $(114)  $(241)  $(114)

 

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

 

The weighted average remaining discount rate is 5.50% for the Company’s operating leases and 5.25% for the financing lease. The weighted average remaining lease term is 1.4 years for the Company’s operating leases and 1.8 years for the financing lease.

  

 

 12 

 

 

 

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. 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, 2024, approximately 1.2 million shares remain available for issuance under both available plans.

 

The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations 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,		 
   2024   2023   2024   2023 
Research and development  $381   $364   $1,156   $1,064 
General and administrative   506    588    1,614    1,683 
Selling and marketing   20    89    148    251 
Total  $907   $1,041   $2,918   $2,998 

 

As of September 30, 2024, there was approximately $7.2 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 2.8 years.

 

The weighted average grant date fair value per share of the options granted under the Company’s Plans were $2.70 and $4.68 for the three months ended September 30, 2024 and 2023, respectively. The weighted average grant date fair value per share of the options granted under the Company’s Plans were $4.26 and $4.94 for the nine months ended September 30, 2024 and 2023, respectively.

 

The following table summarizes stock option activity during the nine months ended
September 30, 2024 (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, 2024   3,369   $7.04           
Granted   536   $5.53           
Exercised   (13)  $6.60           
Forfeited   (69)  $10.02           
Expired   (44)  $14.61           
Outstanding at September 30, 2024   3,779   $6.68    4.53   $– 
Exercisable at September 30, 2024   3,006   $6.67    3.38   $– 

 

During the nine months ended September 30, 2024, the Company granted options under the 2017 and 2023 Plans to purchase approximately 536,000 shares of its common stock to its employees and consultants. The fair value of these options was approximately $2.3 million at the time of grant.

  

 

 13 

 

 

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, 2024 (in thousands except per share data):

        
  

Number of

Shares

  

Weighted-Average

Grant Date Fair Value per Share

 
Outstanding at January 1, 2024   419   $9.21 
Granted   342   $6.06 
Forfeited   (45)  $7.80 
Vested   (204)  $8.93 
Outstanding non-vested shares at September 30 2024   512   $7.34 

 

During the nine months ended September 30, 2024, the Company granted approximately 342,000 restricted stock awards under the 2017 and 2023 Plans. The fair value of these awards was approximately $2.1 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, 2024, or through the date these financial statements have been issued. 

 

 

10. EQUITY

 

On April 28, 2024, the Company sold 2,247 shares of its common stock to the Chief Executive Officer, Scott Bibaud, at a price of $4.45 per share, which was determined to be the fair market value on the date of the transaction. The total proceeds from the sale amounted to approximately $10,000. 

 

   

11. SUBSEQUENT EVENTS

 

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

 

Since September 30, 2024, the Company has issued approximately 489,000 additional shares through its ATM offering at an average price per share of $3.27 resulting in additional net proceeds of approximately $1.6 million.

 

  

 14 

 

 

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 on Form 10-Q. Statements in this Quarterly Report 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, 2023 filed with the SEC on February 15, 2024. 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.

  

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 MSTcad(R) 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.

 

 

 15 

 

 

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. Our license agreement with ST is our first grant of commercial manufacturing and distribution rights. In the fourth quarter of 2023, we completed the first major milestone under the ST license agreement by delivering our MST film recipe and ST accepting the film, resulting in our recognizing license revenue associated with that milestone. ST is currently performing testing to optimize their integration of MST as part of their qualification process. Upon qualification, we will earn additional license fees for the distribution license, after which ST will be entitled to MST-enabled products and royalties will be payable to us for every product sold. There can be no assurance, however, that ST will complete its process qualification and 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 three-month period ended September 30, 2024, we sold approximately 691,000 shares pursuant to the ATM at an average price per share of approximately $3.18, resulting in approximately $2.1 million of net proceeds to the Company after deducting commissions and other offering expenses. During the nine-month period ended September 30, 2024, we sold approximately 1.9 million shares pursuant to the ATM at an average price per share of approximately $4.74, resulting in approximately $8.5 million of net proceeds to the Company 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, 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.

 

Revenue for the three and nine months ended September 30, 2024 was approximately $22,000 and $112,000 respectively. Our revenue in 2024 consisted of MSTcad licensing and related consulting services revenue, and engineering services revenue from the delivery of MST wafers. Revenue was not recorded during the three and nine months ended September 30, 2023.

  

Cost of revenue. Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide deliverables that result in payment of success fees, delivery of wafers delivered as part of integration license agreements and consulting services provided for our MSTcad licenses. Cost of revenue is expensed when incurred and may not correspond with revenue earned. Cost of revenue for the three and nine months ended September 30, 2024 was approximately $3,000 and $110,000, 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. Cost of revenue was not recorded during the three and nine months ended September 30, 2023.

 

Operating expenses. Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the three months ended September 30, 2024 and 2023, our operating expenses totaled approximately $4.8 million and $5.4 million, respectively. For the nine months ended September 30, 2024 and 2023, our operating expenses totaled approximately $14.5 million and $15.9 million, respectively.

 

 

 16 

 

 

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, 2024 and 2023, we incurred approximately $2.8 million and $3.3 million, respectively, of research and development expenses, a decrease of approximately $546,000, or 17%. This decrease was primarily due to decrease of approximately $540,000 in outsourced research and development as our foundry services provider, TSI Semiconductor, ceased providing these services as of January 31, 2024 after it was acquired by Robert Bosch LLC.

 

For the nine months ended September 30, 2024 and 2023, we incurred approximately $8.2 million and $9.5 million, respectively, of research and development expenses, a decrease of approximately $1.3 million, or 14%. This decrease was primarily due to a decline of approximately $1.4 million in outsourced research and development as we discontinued working with TSI Semiconductor as of January 31, 2024.

 

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 $1.8 million and $1.7 million for the three-month periods ended September 30, 2024 and 2023, respectively, representing an increase of approximately $129,000, or 8%. The increase is primarily related to increases of approximately $108,000 in employee costs and approximately $67,000 in legal costs and fees related to our patent portfolio. These costs are partially offset by a decrease of approximately $82,000 in stock-based compensation costs.

 

General and administrative costs were approximately $5.5 million and $5.2 million for the nine months ended September 30, 2024 and 2023, respectively, representing an increase of approximately $255,000, or 5%. The increase is primarily related to increases of approximately $207,000 in payroll and benefits costs and approximately $226,000 in legal costs and fees related to our patent portfolio. These increases were partly offset by decreases of approximately $85,000 in corporate legal expenses and approximately $69,000 in stock-based compensation expense.

 

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, 2024 and 2023 were approximately $248,000 and $365,000, respectively, representing a decrease of approximately $117,000, or 32%. Selling and marketing expenses for the nine months ended September 30, 2024 and 2023 were approximately $805,000 and $1.1 million, respectively, representing a decrease of approximately $342,000, or 30%. The decrease in costs for both the three and nine month periods is primarily due to a reduction in headcount.

  

Interest income. Interest income for three months ended September 30, 2024 and 2023 was approximately $176,000 and $177,000, respectively. Interest income for nine months ended September 30, 2024 and 2023 was approximately $566,000 and $528,000, respectively. Interest income for the periods presented reflected interest earned on our cash, cash equivalents and short-term investments.

 

Accretion income. Accretion income for the three months ended September 30, 2024 and 2023 was approximately $59,000 and $112,000, respectively. Accretion income for the nine months ended September 30, 2024 and 2023 was approximately $152,000 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.

 

Interest expense. Interest expense for the three months ended September 30, 2024 and 2023 was approximately $30,000 and $47,000, respectively. Interest expense for the nine months ended September 30, 2024 and 2023 was approximately $104,000 and $151,000, respectively. Interest expense is related to the tool financing lease entered into in August 2021.

 

Other income, net. Other income for the three and nine months ended September 30, 2024 of approximately $0 and $72,000, consisted of a refundable state research and development tax credit, net of filing costs and tax consulting services received in the second quarter of 2024. Other income for the three and nine months ended September 30, 2023 of approximately $72,000 also consisted of a refundable state research and development tax credit, net of filing costs and tax consulting services received in the third quarter of 2023.

 

 

 17 

 

  

Cash Flows from Operating, Investing and Financing Activities

 

Net cash used in operating activities of approximately $10.2 million for the nine months ended September 30, 2024 resulted primarily from our net loss of approximately $13.8 million offset by approximately $2.9 million of stock-based compensation and the amortization of our right of use assets of approximately $1.0 million offset by increases in our payroll-related accruals.

 

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 provided by investing activities of approximately $3.5 million and for the nine months ended September 30, 2024 consisted primarily of the maturity of short-term available-for-sale investments, offset by the purchase of short-term available-for-sale investments.

 

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 provided by financing activities of approximately $7.9 million for the nine months ended September 30, 2024 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 $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. 

  

Liquidity and Capital Resources

 

As of September 30, 2024, we had cash and cash equivalents of approximately $13.8 million, short-term investments of approximately $3.6 million and working capital of approximately $14.4 million. For the nine months ended September 30, 2024, we had a net loss of approximately $13.8 million and used approximately $10.2 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.

 

During the nine-month period ended September 30, 2024, we sold approximately 1.9 million shares of common stock pursuant to the ATM at an average price per share of approximately $4.74, resulting in approximately $8.5 million of net proceeds to the Company after deducting commissions and other offering expenses. Since September 30, 2024, we sold approximately 489,000 additional shares through the ATM offering at an average price per share of $3.27 resulting in additional net proceeds of approximately $1.6 million.

 

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, 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, 2023 filed with the SEC on February 15, 2024.

 

 

 18 

 

 

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, 2024.

 

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, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

  

 

 

 

 19 

 

 

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, 2023 filed with the SEC on February 15, 2024.

 

Item 5. Other Information

 

The table below summarizes the terms of arrangements adopted or terminated by officers or directors during the three months ended September 30, 2024. All of the trading arrangements listed below are intended to satisfy the affirmative defense conditions of Rule 10b5-1c.

 

Name and Position Adoption or Termination Date Total Number of Shares to be Sold (1) Expiration Date
Robert Mears, Adopted Up to 18,530 September 10, 2025
Chief Technology Officer September 10, 2024    

 

(1)    The actual number of shares sold will depend on the vesting of restricted stock awards and the number of shares withheld by the Company to satisfy its income tax withholding obligations, and may vary from the approximate number provided.

 

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

 

 

 20 

 

 

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: October 29, 2024 By: /s/ Scott A. Bibaud  
    Scott A. Bibaud
Chief Executive Officer,		  
    (Principal Executive Officer)  
    and Director  
       
       
Date: October 29, 2024 By: /s/ Francis B. Laurencio  
    Francis B. Laurencio  
    Chief Financial Officer  
    (Principal Financial and  
    Accounting Officer)  

 

 

 

 21 

 

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: October 29, 2024 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: October 29, 2024 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, 2024 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: October 29, 2024
  Scott A. Bibaud    
  Title: President and Chief Executive Officer    
       
By: /s/ Francis B. Laurencio   Dated: October 29, 2024
  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.

 

 

 

 

v3.24.3
Cover - shares
 9 Months Ended
Sep. 30, 2024
Oct. 29, 2024
Cover [Abstract]    
Document Type 10-Q  
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Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-37850  
Entity Registrant Name ATOMERA INC  
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 $0.001  
Trading Symbol ATOM  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   28,778,128
v3.24.3
Condensed Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 13,757 $ 12,591
Short-term investments 3,585 6,940
Accounts receivable 6 0
Unbilled contracts receivable 0 550
Interest receivable 56 79
Prepaid expenses and other current assets 388 244
Total current assets 17,792 20,404
Property and equipment, net 63 100
Long-term prepaid maintenance and supplies 91 91
Security deposit 14 14
Operating lease right-of-use asset 341 517
Financing lease right-of-use-asset 1,839 2,903
Total assets 20,140 24,029
Current liabilities:    
Accounts payable 786 618
Accrued expenses 172 222
Accrued payroll related expenses 968 1,382
Current operating lease liability 258 264
Current financing lease liability 1,194 1,328
Deferred revenue 8 0
Total current liabilities 3,386 3,814
Long-term operating lease liability 80 295
Long-term financing lease liability 781 1,750
Total liabilities 4,247 5,859
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, 2024 and December 31, 2023 0 0
Common stock: $0.001 par value, authorized 47,500 shares; 28,289 shares issued and outstanding as of September 30, 2024; and 26,107 shares issued and outstanding as of December 31, 2023 28 26
Additional paid in capital 232,726 221,229
Other comprehensive income 2 0
Accumulated deficit (216,863) (203,085)
Total stockholders’ equity 15,893 18,170
Total liabilities and stockholders’ equity $ 20,140 $ 24,029
v3.24.3
Condensed Balance Sheets (Parenthetical) - $ / shares
shares in Thousands
Sep. 30, 2024
Dec. 31, 2023
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 28,289 26,107
Common stock, shares outstanding 28,289 26,107
v3.24.3
Condensed Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Revenue $ 22 $ 0 $ 112 $ 0
Cost of revenue (3) 0 (110) 0
Gross margin 19 0 2 0
Operating expenses        
Research and development 2,759 3,305 8,206 9,533
General and administrative 1,812 1,683 5,455 5,200
Selling and marketing 248 365 805 1,147
Total operating expenses 4,819 5,353 14,466 15,880
Loss from operations (4,800) (5,353) (14,464) (15,880)
Other income (expense)        
Interest income 176 177 566 528
Accretion income 59 112 152 221
Interest expense (30) (47) (104) (151)
Other income, net 0 72 72 72
Total other income (expense), net 205 314 686 670
Net loss $ (4,595) $ (5,039) $ (13,778) $ (15,210)
Net loss per common share, basic $ (0.17) $ (0.20) $ (0.52) $ (0.62)
Net loss per common share, diluted $ (0.17) $ (0.20) $ (0.52) $ (0.62)
Weighted average number of common shares outstanding, basic 27,406 25,255 26,640 24,536
Weighted average number of common shares outstanding, diluted 27,406 25,255 26,640 24,536
v3.24.3
Condensed Statements of Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Net loss $ (4,595) $ (5,039) $ (13,778) $ (15,210)
Unrealized gain (loss) on available-for-sale securities 9 (1) 2 (3)
Net loss $ (4,586) $ (5,040) $ (13,776) $ (15,213)
v3.24.3
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, 2022 $ 24 $ 203,585 $ (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 exercise 39 39
Stock option exercise, 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 (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 exercise 39 39
Stock option exercise, 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 exercise 39 39
Stock option exercise, shares 10        
Forfeited restricted stock awards
Forfeiture of restricted stock issuance, 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        
Beginning balance, value at Dec. 31, 2023 $ 26 221,229 (203,085) 18,170
Beginning balance, shares at Dec. 31, 2023 26,107        
Stock-based compensation 1,024 1,024
Stock-based compensation, shares 275        
Stock option exercise 86 86
Stock option exercise, shares 13        
Forfeited restricted stock awards
Forfeiture of restricted stock issuance, shares (20)        
At-the-market sale of stock, net of commissions and expenses $ 1 3,949 3,950
At-the-market sale of stock, net of commissions and expenses, shares 510        
Net loss (4,822) (4,822)
Unrealized gain (loss) on available-for-sale securities (1) (1)
Ending balance, value at Mar. 31, 2024 $ 27 226,288 (1) (207,907) 18,407
Ending balance, shares at Mar. 31, 2024 26,885        
Beginning balance, value at Dec. 31, 2023 $ 26 221,229 (203,085) 18,170
Beginning balance, shares at Dec. 31, 2023 26,107        
Net loss         (13,778)
Unrealized gain (loss) on available-for-sale securities         2
Ending balance, value at Sep. 30, 2024 $ 28 232,726 2 (216,863) 15,893
Ending balance, shares at Sep. 30, 2024 28,289        
Beginning balance, value at Mar. 31, 2024 $ 27 226,288 (1) (207,907) 18,407
Beginning balance, shares at Mar. 31, 2024 26,885        
Stock-based compensation 987 987
Stock-based compensation, shares 65        
Forfeited restricted stock awards
Forfeiture of restricted stock issuance, shares (11)        
At-the-market sale of stock, net of commissions and expenses $ 1 2,441 2,442
At-the-market sale of stock, net of commissions and expenses, shares 669        
Other sale 10 10
Other sale, shares 2        
Net loss (4,361) (4,361)
Unrealized gain (loss) on available-for-sale securities (6) (6)
Ending balance, value at Jun. 30, 2024 $ 28 229,726 (7) (212,268) 17,479
Ending balance, shares at Jun. 30, 2024 27,610        
Stock-based compensation 907 907
Forfeited restricted stock awards  
Forfeiture of restricted stock issuance, shares (12)        
At-the-market sale of stock, net of commissions and expenses 2,093 2,093
At-the-market sale of stock, net of commissions and expenses, shares 691        
Net loss (4,595) (4,595)
Unrealized gain (loss) on available-for-sale securities 9 9
Ending balance, value at Sep. 30, 2024 $ 28 $ 232,726 $ 2 $ (216,863) $ 15,893
Ending balance, shares at Sep. 30, 2024 28,289        
v3.24.3
Condensed Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES    
Net Loss $ (13,778) $ (15,210)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 42 60
Operating lease right of use asset amortization 176 159
Financing lease right of use asset amortization 823 865
Stock-based compensation 2,918 2,998
Net accretion of discounts on available-for-sale securities (135) (198)
Changes in operating assets and liabilities:    
Accounts receivable (6) 0
Unbilled contracts receivable 550 0
Interest receivable 34 (13)
Prepaid and other current assets (144) 26
Accounts payable (11) 65
Accrued expenses (50) 57
Accrued payroll expenses (414) (269)
Operating lease liability (221) (189)
Deferred revenue 8 0
Net cash used in operating activities (10,208) (11,649)
CASH FLOWS FROM INVESTING ACTIVITIES    
Acquisition of property and equipment (6) (31)
Purchase of available-for-sale securities (5,268) (16,595)
Maturity of available-for-sale securities 8,750 9,000
Net cash provided by/(used in) investing activities 3,476 (7,626)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from at-the-market sale of stock, net of commissions and expenses 8,485 11,248
Proceeds from exercise of stock options 86 117
Proceeds from stock sale 10 0
Payments on principal of financing lease (683) (632)
Net cash provided by financing activities 7,898 10,733
Net increase/(decrease) in cash and cash equivalents 1,166 (8,542)
Cash and cash equivalents at beginning of period 12,591 21,184
Cash and cash equivalents at end of period 13,757 12,642
Supplemental information:    
Cash paid for interest 85 151
Cash paid for taxes $ 0 $ 0
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure [Table]                
Net Income (Loss) $ (4,595) $ (4,361) $ (4,822) $ (5,039) $ (5,152) $ (5,019) $ (13,778) $ (15,210)
v3.24.3
Insider Trading Arrangements
shares in Thousands
 3 Months Ended
Sep. 30, 2024
shares
Trading Arrangements, by Individual [Table]  
Rule 10b5-1 Arrangement Adopted true
Non-Rule 10b5-1 Arrangement Adopted false
Adoption Date September 10, 2024
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Robert Mears [Member]  
Trading Arrangements, by Individual [Table]  
Name Robert Mears
Title Chief Technology Officer
Expiration Date September 10, 2025
Trading Arrangement, Securities Aggregate Available Amount 18,530
v3.24.3
NATURE OF OPERATIONS
 9 Months Ended
Sep. 30, 2024
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 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.

 
v3.24.3
LIQUIDITY AND MANAGEMENT PLANS
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
LIQUIDITY AND MANAGEMENT PLANS

 

2. LIQUIDITY AND MANAGEMENT PLANS

 

At September 30, 2024, the Company had cash, cash equivalents and short-term investments of approximately $17.3 million and working capital of approximately $14.4 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 initial organization, financing, expenditures, and scaling of a new business that is not generating positive cashflow.

 

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 agents, having aggregate offering proceeds of up to $50.0 million (the “ATM”). During the three-month period ended September 30, 2024, the Company sold approximately 691,000 shares pursuant to the ATM at an average price per share of approximately $3.18, resulting in approximately $2.1 million of net proceeds to the Company after deducting commissions and other offering expenses. During the nine-month period ended September 30, 2024, the Company sold approximately 1.9 million shares pursuant to the ATM at an average price per share of approximately $4.74, resulting in approximately $8.5 million of net proceeds to the Company after deducting commissions and other offering expenses. As of September 30, 2024, the Company has a remaining capacity on the ATM of approximately $20.9 million.

 

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.  

 
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2024
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, 2024.

 

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, 2024 and 2023 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, 2023 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2024. 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 condensed balance sheets 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, net in the condensed statements of operations when incurred. Unrealized gains and losses are included in other comprehensive income (loss) on the condensed balance sheets.

 

Recent Accounting Standards

 

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories included in each reported measure of a segment's profit or loss on an interim and annual basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The update should be applied retrospectively to all prior periods presented in the financial statements. The Company has not yet adopted this update and is does not expect this new standard will have on its financial position and results of operations.

 
v3.24.3
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2024
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 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, 2024 and December 31, 2023 consisted of the following (in thousands):

                
   September 30, 2024 
   Cost   Unrealized Gain/(Loss)   Accretion of Discount   Fair Value 
Cash  $22   $–   $–   $22 
Money market funds   13,735    –    –    13,735 
US agency bonds   3,539    2    44    3,585 
Total  $17,296   $2   $44   $17,342 

 

   December 31, 2023 
   Cost   Accretion of Discount   Fair Value 
Cash  $157   $–   $157 
Money market funds   12,434    –    12,434 
US treasury bills   2,931    50    2,981 
US agency bonds   3,938    21    3,959 
Total  $19,460   $71   $19,531 

 
v3.24.3
REVENUE
 9 Months Ended
Sep. 30, 2024
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). Revenue from integration license agreements and from MSTcad licenses are recognized over the length of the license.

 

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,

 
   2024   2023   2024   2023 
Primary geographic markets                    
North America  $22   $–   $112   $– 
Asia Pacific   –    –    –    – 
Total  $22   $–   $112   $– 
                     
Timing of revenue recognition                    
Products and services transferred at a point in time  $–   $–   $50   $– 
Products and services transferred over time   22    –    62    – 
Total  $22   $–   $112   $– 

 

Unbilled contracts receivable

 

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. All unbilled contracts receivable as of December 31, 2023 were billed and received during the nine months ended September 30, 2024.

 

Deferred Revenue

 

The Company records deferred revenue for customers that were issued invoices, but the Company has not yet recognized the revenue based on its revenue recognition policy. As of September 30, 2024, the Company has approximately $8,000 of deferred revenue that it expects to recognize over the next four months.

 
v3.24.3
BASIC AND DILUTED LOSS PER SHARE
 9 Months Ended
Sep. 30, 2024
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 (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,

 
   2024   2023 
Stock Options   3,779    3,370 
Unvested restricted stock   512    481 
Total   4,291    3,851 

   
v3.24.3
LEASES
 9 Months Ended
Sep. 30, 2024
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, 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 August 1, 2024, the lease payments for this tool were adjusted to $124,071 per month for the period August 1, 2024 through July 31, 2025. 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 2023, the Company entered into a lease agreement for a tool in Tempe, Arizona. The term of this lease is for 12 months beginning on January 1, 2024 for $87,000 per month. Since the lease term is not for more than one year and there are no extension provisions in the lease, 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,

 
   2024   2023   2024   2023 
Financing lease costs:                    
Amortization of ROU assets  $261   $284   $823   $865 
Interest on lease liabilities   30    47    104    151 
Total financing lease costs  $291   $331   $927   $1,016 
                     
Operating lease costs:                    
Fixed lease costs  $65   $66   $196   $192 
Variable lease costs   1    1    1    1 
Short-term lease costs   261    251    783    792 
Total operating lease costs  $327   $318   $980   $985 

  

Future minimum payments under non-cancellable leases as of September 30, 2024 were as follows (in thousands):

        
For the Year Ended December 31,  Financing leases   Operating leases 
Remaining 2024  $297   $40 
2025   1,291    288 
2026   478    24 
Total future minimum lease payments   2,066    352 
Less imputed interest   (91)   (14)
Total lease liability  $1,975   $338 

 

The table below 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,

 
   2024   2023   2024   2023 
Operating cash flow information:                    
Cash paid for amounts included in the measurement of operating lease liabilities  $60   $55   $241   $216 
Cash paid for amounts included in the measurement of financing liabilities  $219   $300   $768   $782 
Non-cash activity:                    
Right-of-use assets obtained in exchange for operating lease obligations  $–   $–   $–   $33 
Remeasurement of right-of-use assets and liability in financing lease  $(241)  $(114)  $(241)  $(114)

 

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

 

The weighted average remaining discount rate is 5.50% for the Company’s operating leases and 5.25% for the financing lease. The weighted average remaining lease term is 1.4 years for the Company’s operating leases and 1.8 years for the financing lease.

  
v3.24.3
STOCK BASED COMPENSATION
 9 Months Ended
Sep. 30, 2024
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. 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, 2024, approximately 1.2 million shares remain available for issuance under both available plans.

 

The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations 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,		 
   2024   2023   2024   2023 
Research and development  $381   $364   $1,156   $1,064 
General and administrative   506    588    1,614    1,683 
Selling and marketing   20    89    148    251 
Total  $907   $1,041   $2,918   $2,998 

 

As of September 30, 2024, there was approximately $7.2 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 2.8 years.

 

The weighted average grant date fair value per share of the options granted under the Company’s Plans were $2.70 and $4.68 for the three months ended September 30, 2024 and 2023, respectively. The weighted average grant date fair value per share of the options granted under the Company’s Plans were $4.26 and $4.94 for the nine months ended September 30, 2024 and 2023, respectively.

 

The following table summarizes stock option activity during the nine months ended
September 30, 2024 (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, 2024   3,369   $7.04           
Granted   536   $5.53           
Exercised   (13)  $6.60           
Forfeited   (69)  $10.02           
Expired   (44)  $14.61           
Outstanding at September 30, 2024   3,779   $6.68    4.53   $– 
Exercisable at September 30, 2024   3,006   $6.67    3.38   $– 

 

During the nine months ended September 30, 2024, the Company granted options under the 2017 and 2023 Plans to purchase approximately 536,000 shares of its common stock to its employees and consultants. The fair value of these options was approximately $2.3 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, 2024 (in thousands except per share data):

        
  

Number of

Shares

  

Weighted-Average

Grant Date Fair Value per Share

 
Outstanding at January 1, 2024   419   $9.21 
Granted   342   $6.06 
Forfeited   (45)  $7.80 
Vested   (204)  $8.93 
Outstanding non-vested shares at September 30 2024   512   $7.34 

 

During the nine months ended September 30, 2024, the Company granted approximately 342,000 restricted stock awards under the 2017 and 2023 Plans. The fair value of these awards was approximately $2.1 million at the time of grant.

 
v3.24.3
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2024
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, 2024, or through the date these financial statements have been issued. 

 
v3.24.3
EQUITY
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
EQUITY

 

10. EQUITY

 

On April 28, 2024, the Company sold 2,247 shares of its common stock to the Chief Executive Officer, Scott Bibaud, at a price of $4.45 per share, which was determined to be the fair market value on the date of the transaction. The total proceeds from the sale amounted to approximately $10,000. 

 
v3.24.3
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

   

11. SUBSEQUENT EVENTS

 

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

 

Since September 30, 2024, the Company has issued approximately 489,000 additional shares through its ATM offering at an average price per share of $3.27 resulting in additional net proceeds of approximately $1.6 million.

 
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2024
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, 2024.

 
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, 2024 and 2023 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, 2023 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2024. 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 condensed balance sheets 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, net in the condensed statements of operations when incurred. Unrealized gains and losses are included in other comprehensive income (loss) on the condensed balance sheets.

 
Recent Accounting Standards

Recent Accounting Standards

 

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories included in each reported measure of a segment's profit or loss on an interim and annual basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The update should be applied retrospectively to all prior periods presented in the financial statements. The Company has not yet adopted this update and is does not expect this new standard will have on its financial position and results of operations.

 
v3.24.3
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of fair value measurements
                
   September 30, 2024 
   Cost   Unrealized Gain/(Loss)   Accretion of Discount   Fair Value 
Cash  $22   $–   $–   $22 
Money market funds   13,735    –    –    13,735 
US agency bonds   3,539    2    44    3,585 
Total  $17,296   $2   $44   $17,342 

 

   December 31, 2023 
   Cost   Accretion of Discount   Fair Value 
Cash  $157   $–   $157 
Money market funds   12,434    –    12,434 
US treasury bills   2,931    50    2,981 
US agency bonds   3,938    21    3,959 
Total  $19,460   $71   $19,531 
v3.24.3
REVENUE (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of disaggregated revenue by primary geographical markets and timing of revenue recognition
                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2024   2023   2024   2023 
Primary geographic markets                    
North America  $22   $–   $112   $– 
Asia Pacific   –    –    –    – 
Total  $22   $–   $112   $– 
                     
Timing of revenue recognition                    
Products and services transferred at a point in time  $–   $–   $50   $– 
Products and services transferred over time   22    –    62    – 
Total  $22   $–   $112   $– 
v3.24.3
BASIC AND DILUTED LOSS PER SHARE (Tables)
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Schedule of anti-dilutive shares
        
  

Nine Months Ended

September 30,

 
   2024   2023 
Stock Options   3,779    3,370 
Unvested restricted stock   512    481 
Total   4,291    3,851 
v3.24.3
LEASES (Tables)
 9 Months Ended
Sep. 30, 2024
Leases  
Schedule of lease costs
                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2024   2023   2024   2023 
Financing lease costs:                    
Amortization of ROU assets  $261   $284   $823   $865 
Interest on lease liabilities   30    47    104    151 
Total financing lease costs  $291   $331   $927   $1,016 
                     
Operating lease costs:                    
Fixed lease costs  $65   $66   $196   $192 
Variable lease costs   1    1    1    1 
Short-term lease costs   261    251    783    792 
Total operating lease costs  $327   $318   $980   $985 
Schedule of future minimum payments
        
For the Year Ended December 31,  Financing leases   Operating leases 
Remaining 2024  $297   $40 
2025   1,291    288 
2026   478    24 
Total future minimum lease payments   2,066    352 
Less imputed interest   (91)   (14)
Total lease liability  $1,975   $338 
Schedule of supplemental information and non-cash activity
                
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2024   2023   2024   2023 
Operating cash flow information:                    
Cash paid for amounts included in the measurement of operating lease liabilities  $60   $55   $241   $216 
Cash paid for amounts included in the measurement of financing liabilities  $219   $300   $768   $782 
Non-cash activity:                    
Right-of-use assets obtained in exchange for operating lease obligations  $–   $–   $–   $33 
Remeasurement of right-of-use assets and liability in financing lease  $(241)  $(114)  $(241)  $(114)
v3.24.3
STOCK BASED COMPENSATION (Tables)
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of stock-based compensation expense
                
  

Three Months Ended

September 30,

   Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
Research and development  $381   $364   $1,156   $1,064 
General and administrative   506    588    1,614    1,683 
Selling and marketing   20    89    148    251 
Total  $907   $1,041   $2,918   $2,998 
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, 2024   3,369   $7.04           
Granted   536   $5.53           
Exercised   (13)  $6.60           
Forfeited   (69)  $10.02           
Expired   (44)  $14.61           
Outstanding at September 30, 2024   3,779   $6.68    4.53   $– 
Exercisable at September 30, 2024   3,006   $6.67    3.38   $– 
Schedule of restricted stock activity
        
  

Number of

Shares

  

Weighted-Average

Grant Date Fair Value per Share

 
Outstanding at January 1, 2024   419   $9.21 
Granted   342   $6.06 
Forfeited   (45)  $7.80 
Vested   (204)  $8.93 
Outstanding non-vested shares at September 30 2024   512   $7.34 
v3.24.3
LIQUIDITY AND MANAGEMENT PLANS (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Sep. 30, 2023
Subsidiary, Sale of Stock [Line Items]      
Cash, cash equivalents and short-term investments $ 17,300,000 $ 17,300,000  
Working capital $ 14,400,000 14,400,000  
Proceeds from sale of stock, value   $ 8,485,000 $ 11,248,000
ATM [Member]      
Subsidiary, Sale of Stock [Line Items]      
Stock issued new, shares 691,000 1,900,000  
Average price per share $ 3.18 $ 4.74  
Proceeds from sale of stock, value $ 2,100,000 $ 8,500,000  
Remaining offering capacity $ 20,900,000 $ 20,900,000  
v3.24.3
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 1 [Member] - Fair Value, Recurring [Member] - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost $ 17,296 $ 19,460
Unrealized Gain/(Loss) 2  
Accretion of Discount 44 71
Fair Value 17,342 19,531
Cash [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 22 157
Unrealized Gain/(Loss) 0  
Accretion of Discount 0 0
Fair Value 22 157
Money Market Funds [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 13,735 12,434
Unrealized Gain/(Loss) 0  
Accretion of Discount 0 0
Fair Value 13,735 12,434
US Agency Bonds [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost 3,539 3,938
Unrealized Gain/(Loss) 2  
Accretion of Discount 44 21
Fair Value $ 3,585 3,959
US Treasury Bills [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost   2,931
Accretion of Discount   50
Fair Value   $ 2,981
v3.24.3
REVENUE (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]        
Revenue $ 22 $ 0 $ 112 $ 0
Transferred at Point in Time [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 0 0 50 0
Transferred over Time [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 22 0 62 0
Timing Of Revenue Recognition [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 22 0 112 0
North America [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 22 0 112 0
Asia Pacific [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 0 0 0 0
Primary Geographic Market [Member]        
Disaggregation of Revenue [Line Items]        
Revenue $ 22 $ 0 $ 112 $ 0
v3.24.3
REVENUE (Details Narrative) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]    
Deferred revenue $ 8 $ 0
v3.24.3
BASIC AND DILUTED LOSS PER SHARE (Details) - shares
shares in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Anti dilutive shares 4,291 3,851
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Anti dilutive shares 3,779 3,370
Unvested Restricted Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Anti dilutive shares 512 481
v3.24.3
LEASES (Details - Lease costs) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Financing lease costs:        
Amortization of ROU assets $ 261 $ 284 $ 823 $ 865
Interest on lease liabilities 30 47 104 151
Total financing lease costs 291 331 927 1,016
Operating lease costs:        
Fixed lease costs 65 66 196 192
Variable lease costs 1 1 1 1
Short-term lease costs 261 251 783 792
Total operating lease costs $ 327 $ 318 $ 980 $ 985
v3.24.3
LEASES (Details - Minimum lease payments)
$ in Thousands
Sep. 30, 2024
USD ($)
Operating Leases [Member]  
Debt Instrument [Line Items]  
Remaining 2024 $ 40
2025 288
2026 24
Total future minimum lease payments 352
Less imputed interest (14)
Total lease liability 338
Financing Leases [Member]  
Debt Instrument [Line Items]  
Remaining 2024 297
2025 1,291
2026 478
Total future minimum lease payments 2,066
Less imputed interest (91)
Total lease liability $ 1,975
v3.24.3
LEASES (Details - Cash flow effect) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Operating cash flow information:        
Cash paid for amounts included in the measurement of operating lease liabilities $ 60 $ 55 $ 241 $ 216
Cash paid for amounts included in the measurement of financing liabilities 219 300 768 782
Non-cash activity:        
Right-of-use assets obtained in exchange for operating lease obligations 0 0 0 33
Remeasurement of right-of-use assets and liability in financing lease $ (241) $ (114) $ (241) $ (114)
v3.24.3
LEASES (Details Narrative) - USD ($)
 9 Months Ended 12 Months Ended
May 01, 2023
Sep. 30, 2024
Dec. 31, 2023
Lessee operating lease description 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.   In December 2023, the Company entered into a lease agreement for a tool in Tempe, Arizona. The term of this lease is for 12 months beginning on January 1, 2024 for $87,000 per month. Since the lease term is not for more than one year and there are no extension provisions in the lease, the future lease payments are not included in the lease obligations on the Company’s condensed balance sheets.
Right-of-use asset   $ 341,000 $ 517,000
Short-term operating lease liability   258,000 264,000
Long-term operating lease liability   $ 80,000 $ 295,000
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.  
Weighted average remaining discount rate for operating leases   5.50%  
Weighted average remaining discount rate for financing leases   5.25%  
Weighted average lease term for operating lease   1 year 4 months 24 days  
Weighted average lease term for financing lease   1 year 9 months 18 days  
Tempe A Z Office [Member]      
Right-of-use asset $ 33,000    
Short-term operating lease liability 12,000    
Long-term operating lease liability $ 21,000    
v3.24.3
STOCK BASED COMPENSATION (Details - Compensation expense) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation $ 907 $ 1,041 $ 2,918 $ 2,998
Research and Development Expense [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation 381 364 1,156 1,064
General and Administrative Expense [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation 506 588 1,614 1,683
Selling And Marketing [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
Allocated stock-based compensation $ 20 $ 89 $ 148 $ 251
v3.24.3
STOCK BASED COMPENSATION (Details - Stock option activity) - Equity Option [Member]
$ / shares in Units, $ in Thousands
 9 Months Ended
Sep. 30, 2024
USD ($)
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of options outstanding, beginning balance | shares 3,369,000
Options outstanding, weighted average exercise prices per share, beginning balance | $ / shares $ 7.04
Number of options granted | shares 536,000
Options granted, weighted average exercise prices per share | $ / shares $ 5.53
Number of options exercised | shares (13,000)
Options exercised, weighted average exercise prices per share | $ / shares $ 6.60
Number of options forfeited | shares (69,000)
Options forfeited, weighted average exercise prices per share | $ / shares $ 10.02
Number of options expired | shares (44,000)
Options expired, weighted average exercise prices per share | $ / shares $ 14.61
Number of options outstanding, ending balance | shares 3,779,000
Options outstanding, weighted average exercise prices per share, ending balance | $ / shares $ 6.68
Options outstanding, weighted average remaining contractual term 4 years 6 months 10 days
Options outstanding, intrinsic value | $ $ 0
Options exercisable | shares 3,006,000
Options exercisable, weighted average exercise prices per share | $ / shares $ 6.67
Options exercisable, weighted average remaining contractual term 3 years 4 months 17 days
Options exercisable, intrinsic value | $ $ 0
v3.24.3
STOCK BASED COMPENSATION (Details - Restricted stock) - Restricted Stock [Member]
 9 Months Ended
Sep. 30, 2024
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of restricted stock, Beginning balance | shares 419,000
Outstanding restricted stock, weighted average grant date fair value per share, Beginning balance | $ / shares $ 9.21
Number of restricted stock granted | shares 342,000
Restricted stock granted, weighted average grant date fair value per share | $ / shares $ 6.06
Number of restricted stock, forfeited | shares (45,000)
Restricted stock forfeited, weighted average grant date fair value per share | $ / shares $ 7.80
Number of restricted stock, vested | shares (204,000)
Restricted stock vested, weighted average grant date fair value per share | $ / shares $ 8.93
Number of restricted stock, Ending balance | shares 512,000
Outstanding restricted stock, weighted average grant date fair value per share, Ending balance | $ / shares $ 7.34
v3.24.3
STOCK BASED COMPENSATION (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
May 31, 2023
May 31, 2017
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]            
Shares available for grant 1,200,000   1,200,000      
Equity Option [Member]            
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]            
Unrecognized compensation expense $ 7,200,000   $ 7,200,000      
Unrecognized compensation weighted average period     2 years 9 months 18 days      
Weighted average grant date fair value per share $ 2.70 $ 4.68 $ 4.26 $ 4.94    
Options granted     536,000      
Fair value of options granted     $ 2,300,000      
Restricted Stock [Member]            
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]            
Restricted stock awards granted     342,000      
Fair value of restricted stock awards     $ 2,100,000      
Plan 2017 [Member]            
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]            
Shares authorized for issuance           3,750,000
Plan 2023 [Member]            
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]            
Shares authorized for issuance         2,000,000  
v3.24.3
EQUITY (Details Narrative) - USD ($)
 9 Months Ended
Apr. 28, 2024
Sep. 30, 2024
Sep. 30, 2023
Proceeds from sale of stock   $ 8,485,000 $ 11,248,000
Chief Executive Officer [Member]      
Sale of common stock shares 2,247    
Sale of common stock price per share $ 4.45    
Proceeds from sale of stock $ 10,000    
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