What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-03 compared with 2020-08-07 · 163 added, 120 removed, 260 unchanged (52% of the section changed)

2 unchanged sentences

Condensed Balance

(in thousands,

except per share data)

(in thousands, except

per share data)

September 30,

Current assets:

13 unchanged sentences

Deferred revenue

Total current liabilities

Long term operating lease liability

Total liabilities

2 unchanged sentences

Preferred stock, $ 0.001 par value, authorized 2,500 shares;

none issued and outstanding at June 30, 2020 and December 31, 2019.

none issued and outstanding at September 30, 2020 and December 31, 2019

Common stock, $ 0.001 par value, authorized 47,500 shares;

19,826 and 17,117 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively.

20,971 and 17,117 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

8 unchanged sentences

Three Months ended

Six Months ended

September 30,

Nine Months ended

September 30,

Cost of revenue

13 unchanged sentences

Statements of Stockholders’ Equity

For the Three and Six Months Ended June

For the Three and Nine Months Ended September

30, 2020 and 2019

6 unchanged sentences

Balance March 31, 2020

public offering of common stock, net of commissions and expenses

Underwritten public offering of common stock, net of commissions and expenses

Stock option exercise

1 unchanged sentence

Balance June 30, 2020

At-the-market sale of stock, net of commissions and expenses

Stock option exercise

Stock-based compensation

Warrant Exercise

Balance September 30, 2020

Stockholders’

3 unchanged sentences

Balance March 31, 2019

Registered direct

offering of common stock, net of commissions and expenses

Registered direct offering of common stock, net of commissions and expenses

Stock-based compensation

1 unchanged sentence

$ ( 129,130 )

Stock-based compensation

Balance September 30, 2019

$ ( 132,216 )

The accompanying notes are an integral part

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

19 unchanged sentences

Proceeds from underwritten public offering, net of commissions and expenses

Proceeds from at-the-market sale of stock, net of commissions and expenses

Proceeds from registered direct offering of common stock, net of commissions and expenses

Proceeds from exercise of warrant

Proceeds from exercise of warrants

Proceeds from exercise of stock options

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

7 unchanged sentences

NOTES TO THE UNAUDITED CONDENSED FINANCIAL

For the Three and Six Months Ended June

For the Three and Nine Months Ended September

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.

Atomera Incorporated (“Atomera”

or the “Company”) was incorporated in the state of Delaware in March 2007 under the name MEARS Technologies, Inc.

is engaged in the development, commercialization and licensing of proprietary processes and technologies for the semiconductor

On January 12, 2016, the Company changed its name to Atomera Incorporated.

The Company is in the

development stage, having only recently begun limited revenue-generating activities, and is devoting substantially all of its efforts

toward technology research and development and to obtaining initial customers.

The Company has primarily financed operations through

private placements of equity and debt securities and the Company’s Initial Public Offering (the “IPO”) which

was consummated on August 10, 2016, its underwritten public offering of common stock consummated on October 15, 2018, a registered

direct offering of common stock consummated on May 30, 2019, and its underwritten public offering of common stock consummated on

May 15, 2020.

The Company is in the development stage,

having only recently begun limited revenue-generating activities, and is devoting substantially all of its efforts toward technology

research and development and to commercially licensing its technology to designers and manufacturers of integrated circuits.

Company has primarily financed operations through private placements of equity and debt securities, the Company’s Initial

Public Offering (the “IPO”) which was consummated on August 10, 2016, and subsequent public offerings of its common

On May 15, 2020,

the Company closed an underwritten public offering of 2,024,000

shares of common stock at a public offering price of $ 5.00 per share, resulting in approximately 9400

$9.4 million of net proceeds after deducting underwriting commission and other offering expenses.

On September 2, 2020, Atomera entered into an Equity Distribution Agreement with Craig-Hallum Capital Group LLC, as agent,

under which the Company may offer and sell, from time to time at its sole discretion, shares of its $ 0.001 par value common stock,

in “at the market” offerings to or through the agent as its sales agent, having an aggregate offering price of up

to $ 25,000,000 .

LIQUIDITY AND MANAGEMENT PLANS

At June 30, 2020,

the Company had cash and cash equivalents of approximately $18.0 million 17,965 and working capital of approximately $ 17.0

At September 30,

2020, the Company had cash and cash equivalents of approximately $ 25.3 million

25,297 and working capital of approximately $ 24.1

The Company has generated only limited revenue since inception and has incurred recurring operating losses.

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

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.

13 unchanged sentences

If the Company is unable to secure additional capital, it may be required

to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash.

to curtail its research and development initiatives, change its business strategy and take additional measures to reduce costs

in order to conserve its cash.

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 March 13, 2020 except those noted

below under the caption “Adoption of recent accounting standards”.

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 March 13, 2020 except those noted below under

the caption “Adoption of recent accounting standards”.

Basis of presentation of unaudited condensed financial information

The unaudited condensed

financial statements of the Company for the three and six months ended June 30, 2020 and 2019 have been prepared in accordance

financial statements of the Company for the three and nine months ended September 30, 2020 and 2019 have been prepared in accordance

with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information

37 unchanged sentences

statement disclosure.

Recent accounting standards

August 2020, the FASB issued ASU No.

2020-06, Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging

- Contracts in Entity’s Own Equity (Subtopic 815-40).

The new guidance eliminates the beneficial conversion and

cash conversion accounting models for convertible instruments.

It also amends the accounting for certain contracts in an entity’s

own equity that are currently accounted for as derivatives because of specific settlement provisions.

In addition, the new guidance

modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted

EPS computation.

This guidance is effective as of January 1, 2022 (Early adoption is permitted effective January 1, 2021).

The Company is currently evaluating the effect the updated standard will have on its financial position, results of operations

or financial statement disclosure .

The Company recognizes

4 unchanged sentences

Disaggregation of revenue:

The following table provides information

about disaggregated revenue by primary geographical markets and timing of revenue recognition for the three and six month periods

ended June 30, 2020 and 2019 (in thousands):

The following table provides information about

disaggregated revenue by primary geographical markets and timing of revenue recognition for the three and nine month periods ended

September 30, 2020 and 2019 (in thousands):

Information about disaggregated revenue and timing of revenue

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Primary geographic markets

11 unchanged sentences

are expected to be received more than one year from the reporting date.

The Company records

deferred revenue when revenue will be recognized after invoicing.

During the six months ended June 30, 2020, the Company recognized

The Company records deferred

revenue when revenue will be recognized after invoicing.

During the nine months ended September 30, 2020, the Company recognized

approximately $ 37,000 of revenue that was included in deferred revenue as of December 31, 2019.

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.

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

8 unchanged sentences

would be anti-dilutive (in thousands):

of anti dilutive shares

Three and Six Months Ended

Schedule of anti dilutive shares

Three and Nine Months Ended

September 30,

Stock Options

Unvested restricted stock

The Company leases

corporate office space in Los Gatos, California.

This lease has a remaining term of seven months as of June 30, 2020.

is accounted for under ASC Topic 842 and as a result, the Company recorded an operating lease right-of-use asset and the related

lease liability at January 1, 2019.

The lease liability is based on the present value of the remaining minimum lease payments,

discounted using the Company’s estimated incremental borrowing rate of 10 %.

The lease contains escalating payments on the

anniversary of the commencement.

These additional lease components are included in the measurement of the initial lease liability.

Additional payments based on a change in the Company’s share of the operating expenses, including real estate taxes and insurance,

are recorded as a period expense when incurred.

Lease modifications result in remeasurement of the lease liability.

Lease expense

for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized

on a straight-line basis over the lease term.

The Company leases corporate office space in Los Gatos, California.

In August 2020, the Company and its landlord amended the lease of this office.

This amendment extends the expiration date of the lease from January 2021 to January 2026 and increases the space from 3,396 square feet to 4,101 square feet.

Under Accounting Standard Codification (“ASC”) 842, the lease amendment was treated as a separate lease for the new space and a modification of the lease for the original space.

An additional right-of-use (“ROU”) asset and lease liability of approximately $ 681,000 were recorded during the three and nine months ended September 30, 2020.

The lease liability is based on the present value of the minimum lease payments, discounted using the Company’s estimated incremental borrowing rate of 5.5 % .

The lease contains escalating payments on the anniversary of the original commencement which are included in the measurement of the initial lease liability.

Additional payments based on a change in the Company’s share of the operating expenses, including property taxes and insurance, are recorded as a period expense when incurred.

Lease expense for operating leases consists of the lease payments recognized on a straight-line basis over the lease term.

When the additional space is available for use, the Company expects to record an additional ROU asset and corresponding liability of approximately $ 144,000 .

This is expected in early 2021.

The components of operating

1 unchanged sentence

Components of lease costs

Three Months Ended June 30,

Six Months Ended June 30,

September 30,

Nine Months Ended

September 30,

Fixed lease costs

3 unchanged sentences

Future minimum payments

under non-cancellable leases as of June 30, 2020 were as follows (in thousands):

under non-cancellable leases as of September 30, 2020 were as follows (in thousands):

Schedule of future minimum lease payments

1 unchanged sentence

Remaining 2020

2024 & thereafter

Total future minimum lease payments

1 unchanged sentence

Total lease liability

The below table provides

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

The following table provides

supplemental information and non-cash activity related to the Company’s operating leases (in thousands):

Supplemental non-cash activity related to operating leases

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating cash flow information:

2 unchanged sentences

Right-of-use assets obtained in exchange for the lease obligations

In October 2019, the

Company entered into an agreement to lease a tool for use in the development of the Company’s technology.

The lease is for

five years at $150,000 per month.

The lease commencement date is anticipated to be in August 2020, at which time the Company will

account for the lease under ASC 842.

A prepayment of $ 450,000 was made in the six months ended June 30, 2020, this payment represents

In October 2019, the Company

entered into an agreement to lease a tool for use in the development of the Company’s technology.

The lease is for five years

at $150,000 per month.

The lease commencement date is anticipated to be in November 2020, at which time the Company will account

for the lease under ASC 842.

A prepayment of $ 450,000 was made in the nine months ended September 30, 2020, this payment represents

the final three payments under the lease and is recorded as a long-term prepaid until the lease commencement, at which time it

will be record in accordance with ASC 842.

A summary of warrant

activity for the six months ended June 30, 2020 is as follows (in thousands except per share amounts and contractual term):

A summary of warrant activity

for the nine months ended September 30, 2020 is as follows (in thousands except per share amounts and contractual term):

Schedule of warrant activity

1 unchanged sentence

Outstanding at January 1, 2020

Outstanding at June 30, 2020

Outstanding at September 30, 2020

The warrants outstanding

at June 30, 2020 had an intrinsic value of $ 1.0 million based on a per-share stock price of $9.00 as of June 30, 2020.

at September 30, 2020 had an intrinsic value of approximately $ 396,000 based on a per-share stock price of $10.45 as of September

On March 17, 2020, 196,602

warrants with an exercise price of $3.75 were set to expire.

Prior to the expiration, the Company entered into an agreement

with the warrant holders, whereby it modified the terms of the warrants to extend the expiration date until September 17, 2020

in exchange for the removal of a cashless exercise provision.

Prior to the expiration, the Company entered into an agreement with

the warrant holders, whereby it modified the terms of the warrants to extend the expiration date until September 17, 2020 in exchange

for the removal of a cashless exercise provision.

No other terms were modified.

Due to this modification, the Company

incurred a modification expense of approximately $ 139,000 that is included in general and administrative expenses on the Condensed

Statement of Operations for the six months ended June 30, 2020.

Due to this modification, the Company incurred

a modification expense of approximately $ 139,000 that is included in general and administrative expenses on the Condensed Statement

of Operations for the nine months ended September 30, 2020.

All of the modified warrants were exercised on August 6, 2020.

STOCK BASED COMPENSATION

10 unchanged sentences

the date of grant.

The following table

summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and six

months ended June 30, 2020 and 2019 for stock options and restricted stock granted under the 2017 Plan and the 2007 Plan (in thousands):

The following table summarizes

the stock-based compensation expense recorded in the Company’s results of operations during the three and nine months ended

September 30, 2020 and 2019 for stock options and restricted stock granted under the 2017 Plan and the 2007 Plan (in thousands):

Schedule of stock-based compensation expense

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

1 unchanged sentence

Selling and Marketing

As June 30, 2020, there

was approximately $ 6.5 million of total unrecognized compensation expense related to unvested share-based compensation arrangements

As September 30, 2020,

there was approximately $ 5.8 million of total unrecognized compensation expense related to unvested share-based compensation arrangements

that are expected to vest.

This cost is expected to be recognized over a weighted-average period of 2.7 years.

The weighted average

grant date fair value per share of the options granted under the Company’s 2017 Plan was $ 5.86 and $ 2.75 for the three and

six months ended June 30, 2020, respectively.

The weighted average grant

date fair value per share of the options granted under the Company’s 2017 Plan was $ 7.64 and $ 2.80 for the three and nine

months ended September 30, 2020, respectively.

The weighted average grant date fair value per share of the options granted under

the Company’s 2017 Plan was $ 2.50 for the six months ended June 30, 2019.

The following table

summarizes stock option activity during the six months ended June 30, 2020 (in thousands except exercise prices and contractual

the Company’s 2017 Plan was $ 2.50 for the nine months ended September 30, 2019.

The following table summarizes

stock option activity during the nine months ended September 30, 2020 (in thousands except exercise prices and contractual terms):

Schedule of stock option activity

1 unchanged sentence

Outstanding at January 1, 2020

Outstanding at June 30, 2020

Exercisable at June 30, 2020

During the six months

ended June 30, 2020, the Company granted options under the 2017 Plan to purchase approximately 658,000 shares of its common stock

to its employees.

Outstanding at September 30, 2020

Exercisable at September 30, 2020

During the nine months

ended September 30, 2020, the Company granted options under the 2017 Plan to purchase approximately 664,000 shares of its common

stock to its employees.

The fair value of these options was approximately $ 1.9 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

The following table summarizes all restricted stock activity during the six months ended June 30, 2020 (in thousands except

per share data):

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.

following table summarizes all restricted stock activity during the nine months ended September 30, 2020 (in thousands except per

Schedule of restricted stock option activity

Outstanding at January 1, 2020

Outstanding non-vested shares at June 30, 2020

During the six months

ended June 30, 2020, the Company granted approximately 463,000 restricted stock awards under the 2017 Plan to its employees and

Outstanding non-vested shares at September 30, 2020

During the nine months

ended September 30, 2020, the Company granted approximately 463,000 restricted stock awards under the 2017 Plan to its employees

and directors.

The fair value of these awards was approximately $ 2.1 million at the time of grant.

1 unchanged sentence

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 June 30, 2020, or through the date these financial statements have been issued.

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, 2020, or through the date these financial statements have been issued.

SUBSEQUENT EVENTS

1 unchanged sentence

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

Between October 1, 2020

and the date of filing this report, the Company issued and sold 484,148 shares of its common stock through the At-The-Market program

initiated in September 2020.

Net proceeds from the sale of these shares after sales commissions and expenses was approximately

$5.0 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements