What changed in this filing

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Item 1A. Risk Factors

2022-02-15 compared with 2021-02-19 · 377 added, 463 removed, 43 unchanged (95% of the section changed)

We are subject to various risks that

may harm our business, prospects, financial condition and results of operation or prevent us from achieving our goals.

these risks occur, our business, financial condition or results of operation may be materially adversely affected.

In such case,

the trading price of our common stock could decline and investors could lose all or part of their investment.

We are subject to various risks that may harm

our business, prospects, financial condition and results of operation or prevent us from achieving our goals.

If any of these risks occur,

our business, financial condition or results of operation may be materially adversely affected.

In such case, the trading price of our

common stock could decline and investors could lose all or part of their investment.

Risks Related to Our Business

We only recently

commenced limited revenue producing operations, so it is difficult for potential investors to evaluate our business.

date, our operations have consisted of technology research and development, testing, and joint development work with customers,

potential customers and strategic partners.

Our business model is to derive our revenue primarily from license fees and royalties,

but to date we have only recognized minimal engineering services and licensing revenues.

Our limited operating history makes it

difficult to evaluate the commercial value of our technology or our prospective operations.

As an early-stage company, we are subject

to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business, including,

without limitation:

the timing and success of our plan of

commercialization and the fact that we have not entered into a royalty-based manufacturing or distribution license with a potential

our ability to replicate on a large commercial

scale the benefits of our MST technology that we have demonstrated in preliminary testing;

our ability to execute joint development

agreements with potential customers;

our ability to structure, negotiate and

enforce license agreements that will allow us to operate profitably;

our ability to advance the licensing arrangements

with our initial integration licensees, Asahi Kasei Microdevices, STMicroelectronics and our RF licensee, to royalty-based manufacturing

and distribution licenses;

our success in achieving the milestones included in the JDA

and our success at negotiating distribution and royalty agreements, which are not committed, with our JDA customer;

our ability to reach final acceptance of, and to successfully

operate, a new epitaxial deposition reactor for processing 300mm wafers that we plan to use for internal research and development

and to support customer activities;

our ability to protect our intellectual

property rights;

our ability to raise additional capital

as and when needed.

We only recently commenced

limited revenue producing operations, so it is difficult for potential investors to evaluate our business.

To date, our operations

have consisted of technology research and development, testing, and joint development work with customers, potential customers and strategic

Our business model is to derive our revenue primarily from license fees and royalties, but to date we have only recognized minimal

engineering services and licensing revenues.

Our limited operating history makes it difficult to evaluate the commercial value of our

technology or our prospective operations.

As an early-stage company, we are subject to all the risks inherent in the initial organization,

financing, expenditures, complications and delays in a new business, including, without limitation:

the timing and success of our plan of commercialization and the fact that we have not entered into a royalty-based manufacturing or distribution license with a potential customer;

our ability to replicate on a large commercial scale the benefits of our MST technology that we have demonstrated in preliminary testing;

our ability to execute joint development agreements with potential customers;

our ability to structure, negotiate and enforce license agreements that will allow us to operate profitably;

our ability to advance the licensing arrangements with our initial integration licensees, Asahi Kasei Microdevices, STMicroelectronics and our RF licensee, to royalty-based manufacturing and distribution licenses;

our success in achieving the milestones included in the JDA and our success at negotiating distribution and royalty agreements, which are not committed, with our JDA customer;

our ability to successfully operate, the epitaxial deposition reactor for processing 300mm wafers that we recently began using for internal research and development and to support customer activities;

our ability to protect our intellectual property rights;

our ability to raise additional capital as and when needed.

Investors should evaluate

an investment in us in light of the uncertainties encountered by developing companies in a competitive environment.

no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.

We have a history

of significant operating losses and anticipate continued operating losses for at least the near term.

For the years ended

December 31, 2020 and 2019, we have incurred net losses of approximately $14.9 million and $13.3 million, respectively, and our

operations have used approximately $12.1 million and $10.4 million of cash, respectively.

As of December 31, 2020, we had an accumulated

deficit of approximately $150.1 million.

We will continue to experience negative cash flows from operations until at least such

time as we are able to secure manufacturing and distribution license agreements with one or more foundries, IDMs or fabless semiconductor

manufacturers.

While management will endeavor to generate positive cash flows from the commercialization of our MST technology,

there can be no assurance that we will be successful doing so.

If we are unable to generate positive cash flow within a reasonable

period of time, we may be unable to further pursue our business plan or continue operations.

There can be no assurance

that our efforts will be successful or that we will ultimately be able to attain profitability.

We have a history of

significant operating losses and anticipate continued operating losses for at least the near term.

For the years ended December

31, 2021 and 2020, we have incurred net losses of approximately $15.7 million and $14.9 million, respectively, and our operations have

used approximately $12.4 million and $12.1 million of cash, respectively.

As of December 31, 2021, we had an accumulated deficit of approximately

$165.9 million.

We will continue to experience negative cash flows from operations until at least such time as we are able to secure manufacturing

and distribution license agreements with one or more foundries, IDMs or fabless semiconductor manufacturers.

While management will endeavor

to generate positive cash flows from the commercialization of our MST technology, there can be no assurance that we will be successful

If we are unable to generate positive cash flow within a reasonable period of time, we may be unable to further pursue our business

plan or continue operations.

While we have

entered into three integration license agreements and a joint development agreement, there can be no assurance that any of these

entered into four integration license agreements and a joint development agreement, there can be no assurance that any of these

relationships will advance to further licensing stages or to royalty-based distribution license agreements .

and October 2018, respectively, we entered into separate license agreements with AKM and ST, both of which are leading IDMs.

October 2019, we entered into a license agreement with a leading RF semiconductor supplier.

Our licensees have paid us licensing

fees for the right to build products that integrate MST technology deposited by us onto their semiconductor wafers, but the agreements

do not grant the licensees the right to sell products incorporating MST.

Such rights require our integration licensees to enter

into additional manufacturing and distribution agreements that, if executed, would allow each licensee or their foundry to manufacture

MST-enabled products and to sell them to their customers.

We expect that the manufacturing and distribution agreements will provide

for substantially larger upfront license fee payments than integration license fees and that the agreements will require the respective

licensees to make royalty payments to us based the number and sales price of MST-enabled products they sell to their customers.

However, our ability to enter into royalty-based manufacturing and distribution agreements with our current integration licensees

or with new customers will depend, in large part, on the performance of devices they build using MST and the successful integration

of our MST technology on a high-volume production scale.

Our JDA provides that, upon our delivery of our IP transfer package,

our customer will pay for a manufacturing license and continue work on MST testing and integration using a tool in their own fab,

but the JDA does not commit the customer to take MST to production.

There can be no assurance that our MST technology will deliver

the performance, power or other requirements our customers seek for their products or that the integration of our technology with

our customers’

manufacturing process will be successful in high volume.

In addition, even if our MST technology is successfully

integrated into the licensees’

products, any or all of our licensees may decide, for reasons unrelated to the price or performance

of our MST technology, not to enter into manufacturing and distribution license agreements.

AKM, one of our

licensees, suffered substantial damage to one of its fabs from a fire, impacting their production capability and potentially delaying

their work with us.

On October 20, 2020, a fire broke out in AKM’s factory in Nobeoka, Japan which lasted three days,

causing substantial damage to the building and equipment.

As of the date of this Annual Report, the Nobeoka fab remains closed

and it is unclear whether or when it will re-open.

Although Atomera’s work under our integration license agreement with AKM

did not involve wafers in commercial production in this fab, the fire substantially disrupted AKM’s business and interrupted

their integration and testing of MST.

We expect that cooperation on integrating MST into AKM’s products will continue, but

the fire has cast doubt on the timing for moving toward a manufacturing license or commercial distribution.

The timing of additional

wafer runs with AKM will depend upon, among other things, the timing of either re-opening the Nobeoka fab, moving production to

another fab or external foundry, and AKM’s ability to devote personnel and equipment to MST integration.

In September and

October 2018, respectively, we entered into separate license agreements with AKM and ST, both of which are leading IDMs.

2019, we entered into a license agreement with a leading RF semiconductor supplier.

In February 2022, we entered into an integration

license agreement with a semiconductor foundry.

Our licensees have paid us licensing fees for the right to build products that

integrate MST technology onto their semiconductor wafers, but the agreements do not grant the licensees the right to sell products

incorporating MST.

Such rights require our integration licensees to enter into additional license agreements that, if executed,

would allow each licensee or their foundry to manufacture MST-enabled products and to sell them to their customers.

We expect that

our product qualification and licensing cycle will be lengthy and costly, and our marketing, engineering and sales efforts may

be unsuccessful.

We expect to incur significant engineering, marketing and sales expenses prior to entering into any license

agreements, generating a license fee and establishing a royalty stream from each licensee.

The introduction of any new process

technology into semiconductor manufacturing is a lengthy process and we cannot forecast the length of time it takes to establish

a new licensing relationship.

Based on our engagements with potential customers to date, we believe the time from initial engagement

until our customers execute a license and subsequently incorporate our technologies in their integrated circuits, can take 18 to

36 months or longer.

Our integration license agreements with our current licensees do not commit them to manufacturing or distribution

licenses and we expect those licensees to perform additional tests on evaluation wafers under their respective integration licenses

before deciding whether to enter the next stages of licensing MST.

As such, we will incur additional expenses in our engagements

with our licensees before we receive license fees, if any, for manufacturing and distribution and before any subsequent royalty

stream begins.

Our JDA does grant a manufacturing license but the agreement does not commit our customer to a distribution license.

While we believe our JDA and our license agreements with AKM, ST and our RF licensee could accelerate licensing decisions by other

customers, the evaluation process for new technologies in the semiconductor industry is inherently long and complex and there can

be no assurance that we will successfully convert other customer prospects into paying customers or that any of these customers

will generate sufficient revenue to cover our expenses.

may be adversely affected by the recent coronavirus outbreak.

The ongoing global COVID-19 pandemic—including both

the resulting public health crisis as well as the measures being taken by governments, businesses, and individuals in an effort

to limit COVID-19’s spread—has adversely affected, and continues to adversely affect, our business operations.

impacts of the COVID-19 pandemic on our business operations and workforce, and the duration of such impacts, are uncertain, constantly

and difficult to quantify, but have thus

far included, or in the future may include, the following:

We have implemented certain measures at

our facilities in an effort to protect our employees’

health and well-being (including social distancing, allowing many employees

to work remotely, limiting the number of employees attending meetings, screening employees and visitors when entering facilities,

educating employees about the virus and preventative measures, enhancing cleaning protocols, and suspending employee travel), some

of which have reduced the overall efficiency of our operations and increased costs.

The expected duration of such protective measures

remains uncertain, and we may be required to implement additional measures in the future, further impacting our business operations.

Restrictions on travel imposed by us,

our customers and countries to which we would otherwise travel, have required that contract negotiations and customer presentations

be conducted by video or phone conferences, which have inherent limitations as compared to in-person meetings.

Accordingly, new

customer acquisition and completion of contracts have taken longer than we believe would be possible if we were able to meet with

customers in the manner we had prior to the pandemic outbreak.

Qualification

of our MST technology requires access to our potential customers’

manufacturing tools and facilities, as well as to leased

tools and facilities, which may not be available on a timely basis or at all.

The qualification of a new process technology

like MST entails the integration of our MST film into the complex manufacturing processes employed by our potential customers.

In order to validate the benefits of MST, our customer engagement process involves fabrication of wafers that incorporate MST deposited

by us using our epitaxial deposition tools and then completing the manufacturing of the wafers in our customers’

using their tools.

The semiconductor industry in 2020 exceeded $450 billion in sales, and in recent months the industry has been

characterized by product shortages as strong demand has outstripped supply, resulting in tight capacity among our potential customers.

Accordingly, we have experienced delays in completing the processing of evaluation wafers by our customers as those customers prioritize

utilization of their equipment for production use.

If our customers do not dedicate their equipment and facilities to testing our

products in a timely fashion, we may experience delays that will increase our expenses and delay our customers’

on entering into a commercial license with us.

Additionally, we conduct our ongoing research and development and portions of our

customer evaluation activities using a leased epitaxial (epi) deposition tool.

We recently entered into a lease for a new epi tool

that we believe will accelerate internal development work and customer engagements.

However, epi tools require ongoing, complex

maintenance and they have been and will continue to be subject to both planned and unplanned downtime.

Any interruption in our

epi tool availability may negatively impact the progress of customer work as well as our internal research and development and

accordingly could delay or prevent customers from entering into commercial licenses.

The long-term

success of our business is dependent on a royalty-based business model, which is inherently risky.

the manufacturing and distribution agreements will provide for substantially larger upfront license fee payments than integration

license fees and that the agreements will require the respective licensees to make royalty payments to us based the number and sales

price of MST-enabled products they sell to their customers.

However, our ability to enter into royalty-based manufacturing and

distribution agreements with our current integration licensees or with new customers will depend, in large part, on the performance

of devices they build using MST and the successful integration of our MST technology on a high-volume production scale.

customer paid us for a manufacturing license in the first quarter of 2021 when we delivered our MST recipe to them.

2022, we successfully achieved all the development milestones in the JDA.

Nevertheless, the JDA does not commit the customer to take

MST to production.

There can be no assurance that our MST technology will deliver the performance, power or other requirements our

customers seek for their products or that the integration of our technology with our customers’ manufacturing process will be

successful in high volume.

In addition, even if our MST technology is successfully integrated into the licensees’ products,

any or all of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter the

subsequent license agreements required to take MST to commercial production.

AKM, one of our licensees,

suffered substantial damage to one of its fabs from a fire, impacting their production capability and potentially delaying their work

On October 20, 2020, a fire broke out in AKM’s factory in Nobeoka, Japan which lasted three days, causing substantial

damage to the building and equipment.

As of the date of this Annual Report, the Nobeoka fab remains closed and it is unclear whether or

when it will re-open.

Although Atomera’s work under our integration license agreement with AKM did not involve wafers in commercial

production in this fab, the fire substantially disrupted AKM’s business and interrupted their integration and testing of MST.

expect that cooperation on integrating MST into AKM’s products will continue, but the fire has cast doubt on the timing for moving

toward a manufacturing license or commercial distribution.

The timing of additional wafer runs with AKM will depend upon, among other

things, the timing of either re-opening the Nobeoka fab, moving production to another fab or external foundry, and AKM’s ability

to devote personnel and equipment to MST integration.

We expect that our product

qualification and licensing cycle will be lengthy and costly, and our marketing, engineering and sales efforts may be unsuccessful.

have incurred significant engineering, marketing and sales expenses during customer engagements without entering into license agreements,

generating a license fee or establishing a royalty stream from the customer and we expect that such investments ahead of license revenue

will continue to be necessary in the future.

The introduction of any new process technology into semiconductor manufacturing is a lengthy

process and we cannot forecast with any degree of assurance the length of time it takes to establish a new licensing relationship.

based on our engagements with potential customers to date, we believe the time from initial engagement until our customers incorporate

our technologies in their semiconductor products, can take 18 to 36 months or longer.

Our integration license agreements with our current

licensees do not commit them to manufacturing or distribution licenses and we expect those licensees to perform additional tests on evaluation

wafers under their respective integration licenses before deciding whether to enter the next stages of licensing MST.

As such, we will

incur additional expenses in our engagements with our licensees before we receive license fees, if any, for manufacturing and distribution

and before any subsequent royalty stream begins.

Although we have successfully completed the objectives of our JDA and granted that customer

a manufacturing license, the agreement does not commit our customer to a distribution license.

While we believe our JDA and our integration

license agreements should accelerate licensing decisions by other customers, the evaluation process for new technologies in the semiconductor

industry is inherently long and complex and there can be no assurance that we will successfully convert other customer prospects into

paying customers or that any of these customers will generate sufficient revenue to cover our expenses.

Our business may be

adversely affected by the recent coronavirus outbreak.

The ongoing global COVID-19 pandemic—including both the resulting

public health crisis as well as the measures being taken by governments, businesses, and individuals in an effort to limit COVID-19’s

spread—has adversely affected, and continues to adversely affect, our business operations.

The impacts of the COVID-19 pandemic

on our business operations and workforce, and the duration of such impacts, are uncertain, constantly evolving,

and difficult to quantify, but have thus far included,

or in the future may include, the following:

We have implemented certain measures at our facilities in an effort to protect our employees’ health and well-being (including social distancing, allowing many employees to work remotely, limiting the number of employees attending meetings, screening employees and visitors when entering facilities, educating employees about the virus and preventative measures, enhancing cleaning protocols, and limiting employee travel), some of which have reduced the overall efficiency of our operations and increased costs.

The expected duration of such protective measures remains uncertain, and we may be required to implement additional measures in the future, further impacting our business operations.

Restrictions on travel imposed by us, our customers and countries to which we would otherwise travel, have required that contract negotiations and customer presentations be conducted by video or phone conferences, which have inherent limitations as compared to in-person meetings.

Accordingly, new customer acquisition and completion of contracts have taken longer than we believe would be possible if we were able to meet with customers in the manner we had prior to the pandemic outbreak.

Qualification of our

MST technology requires access to our potential customers’ manufacturing tools and facilities, as well as to leased tools and facilities,

which may not be available on a timely basis or at all.

The qualification of a new process technology like MST entails the integration

of our MST film into the complex manufacturing processes employed by our potential customers.

In order to validate the benefits of MST,

our customer engagement process involves fabrication of wafers that incorporate MST deposited by us using our epitaxial deposition tools

and then completing the manufacturing of the wafers in our customers’ facilities using their tools.

The semiconductor industry in

2021 exceeded $550 billion in sales, and in recent months the industry has been characterized by product shortages as strong demand has

outstripped supply, resulting in tight capacity among our potential customers.

Accordingly, we have experienced delays in completing the

processing of evaluation wafers by our customers as those customers prioritize utilization of their equipment for production use.

customers do not dedicate their equipment and facilities to testing our products in a timely fashion, we may experience delays that will

increase our expenses and delay our customers’ decisions on entering into a commercial license with us.

Additionally, we conduct

our ongoing research and development and portions of our customer evaluation activities using a leased epitaxial (epi) deposition tool.

We recently entered into a lease for a new epi tool that we believe will accelerate internal development work and customer engagements.

However, epi tools require ongoing, complex maintenance and they have been and will continue to be subject to both planned and unplanned

Any interruption in our epi tool availability may negatively impact the progress of customer work as well as our internal research

and development and accordingly could delay or prevent customers from entering into commercial licenses.

The long-term success

of our business is dependent on future royalties paid to us by licensee-customers, whose business requires them to market products

to their end customers.

Royalty payments under our licenses are generally expected to be based on a percentage (i) in the case

of foundries, the selling price of wafers made using MST and (ii) in the case of IDMs and fabless vendors, the selling price of

MST-enabled semiconductor die sold.

We will depend upon our ability to structure, negotiate and enforce agreements for the determination

and payment of royalties, as well as upon our licensees’

compliance with their agreements.

We face risks inherent in a royalty-based

business model, many of which are outside of our control, such as the following:

of our business is dependent on a royalty-based business model, which is inherently risky.

The long-term success of our business

is dependent on future royalties paid to us by licensee-customers, whose business requires them to market products to their end customers.

Royalty payments under our licenses are generally expected to be based on a percentage (i) in the case of foundries, the selling price

of wafers made using MST and (ii) in the case of IDMs and fabless vendors, the selling price of MST-enabled semiconductor die sold.

will depend upon our ability to structure, negotiate and enforce agreements for the determination and payment of royalties, as well as

upon our licensees’ compliance with their agreements.

We face risks inherent in a royalty-based business model, many of which are

outside of our control, such as the following:

the rate of adoption and incorporation of our technology by semiconductor designers and manufacturers and the manufacturers of semiconductor fabrication equipment;

customers’

willingness to agree to an ongoing royalty model, which may impact their wafer or chip costs and margins;

our licensee customers’

ability to successfully market MST-enabled products to their end customers;

customers’ willingness to agree to an ongoing royalty model, which may impact their wafer or chip costs and margins;

our licensee customers’ ability to successfully market MST-enabled products to their end customers;

the length of the design cycle and the ability to successfully integrate our MST technology into integrated circuits;

4 unchanged sentences

We may need additional

financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms

As of December 31, 2020, we had total assets of approximately $39.4 million, cash and cash-equivalents

of approximately $37.9 million and working capital of approximately $36.6 million.

We believe that we have sufficient

capital to fund our current business plans and obligations over, at least, the 12 months following the date of this Annual Report.

However, the full qualification of a new technology like MST can take up to a year or more, and we have limited ability to influence

our customers’

testing and qualification processes.

Accordingly, we may require additional capital prior to obtaining a royalty-based

license or prior to such a license generating sufficient royalty income to cover our ongoing operating expenses.

In the event we

require additional capital over and above the amount of our presently available working capital, we will endeavor to seek additional

funds through various financing sources, including the sale of our equity and debt securities, licensing fees for our technology

and joint ventures with industry partners.

In addition, we will consider alternatives to our current business plan that may enable

to us to achieve material revenue producing operations and meaningful commercial success with a smaller amount of capital.

there can be no guarantees that such funds will be available on commercially reasonable terms, if at all.

If such financing is

not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.

may be concentrated in a few customers and if we lose any of these customers, or these customers do not pay us, our revenues could

be materially adversely affected.&emsp;

If we are able to secure the adoption of our MST by one or more foundries, IDMs

or fabless semiconductor manufacturers, we expect that for at least the first few years substantially all of our revenue will be

generated from license fees and engineering services before customers commence royalty-bearing shipments.

Due to the concentration

and ongoing consolidation within the semiconductor industry, we may also find that over the longer term our royalty-based revenues

are dependent on a relatively few customers.

If we lose any of these customers, or these customers do not pay us, our revenues

could be materially adversely affected.

If we are unable

to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in

decreased productivity.

If our MST proves to be commercially valuable, it is likely that we will experience a rapid growth

phase that could place a significant strain on our managerial, administrative, technical, operational and financial resources.

Our organization, procedures and management may not be adequate to fully support the expansion of our operations or the efficient

execution of our business strategy.

If we are unable to manage future expansion effectively, our business, operations and financial

condition may suffer significantly, resulting in decreased productivity.

financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at

As of December 31, 2021, we had total assets of approximately $36.1 million, cash and cash-equivalents of approximately

$28.7 million and working capital of approximately $26.3 million.

We believe that we have sufficient capital to fund our current

business plans and obligations over, at least, the 12 months following the date of this Annual Report.

However, even after installation

of MST in a customer’s fab under a manufacturing license, the full production qualification of a new technology like MST can take

more than an additional year, and we have limited ability to influence our customers’ testing and qualification processes.

we may require additional capital prior to obtaining a royalty-based license or prior to such a license generating sufficient royalty

income to cover our ongoing operating expenses.

In the event we require additional capital over and above the amount of our presently

available working capital, we will endeavor to seek additional funds through various financing sources, including the sale of our equity

and debt securities, licensing fees for our technology and joint ventures with industry partners.

In addition, we will consider alternatives

to our current business plan that may enable to us to achieve material revenue with a smaller amount of capital.

However, there can be

no guarantees that such funds will be available on commercially reasonable terms, if at all.

If such financing is not available on satisfactory

terms, we may be unable to further pursue our business plan and we may be unable to continue operations.

Our revenues may be

concentrated in a few customers and if we lose any of these customers, or these customers do not pay us, our revenues could be materially

adversely affected.

If we are able to secure the adoption of our MST by one or more foundries, IDMs or fabless semiconductor

manufacturers, we expect that for at least the first few years substantially all of our revenue will be generated from license fees and

engineering services before customers commence royalty-bearing shipments.

Due to the concentration and ongoing consolidation within the

semiconductor industry, we may also find that over the longer term our royalty-based revenues are dependent on a relatively few customers.

If we lose any of these customers, or these customers do not pay us, our revenues could be materially adversely affected.

If we are unable to

manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in decreased

productivity.

If our MST proves to be commercially valuable, it is likely that we will experience a rapid growth phase that could

place a significant strain on our managerial, administrative, technical, operational and financial resources.

Our organization, procedures

and management may not be adequate to fully support the expansion of our operations or the efficient execution of our business strategy.

If we are unable to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting

in decreased productivity.

It may be difficult

for us to verify royalty amounts owed to us under our licensing agreements, and this may cause us to lose revenues.&emsp;

will endeavor to provide that the terms of our license agreements require our licensees to document their use of our technology

and report related data to us on a regular basis.

We will endeavor to provide that the terms of our license agreements give us

the right to audit books and records of our licensees to verify this information, however audits can be expensive, time consuming,

and may not be cost justified based on our understanding of our licensees’

We will endeavor to audit certain

licensees to review the accuracy of the information contained in their royalty reports in an effort to decrease the likelihood

that we will not receive the royalty revenues to which we are entitled under the terms of our license agreements, but we cannot

give assurances that such audits will be effective to that end.

operations could suffer in the event of information technology systems’

failures or security breaches .&emsp;While

we believe that we have implemented adequate security measures within our internal information technology and networking systems,

our information technology systems may be subject to security breaches, damages from computer viruses, natural disasters, terrorism,

and telecommunication failures.

Any system failure or security breach could cause interruptions in our operations, including but

not limited to our technology computer-aided design, or TCAD, modeling using Synopsys software, in addition to the possibility

of losing proprietary information and trade secrets.

To the extent that any disruption or security breach results in inappropriate

disclosure of our confidential information, our competitive position may be adversely affected, and we may incur liability or additional

costs to remedy the damages caused by these disruptions or security breaches.

If we fail to

protect and enforce our intellectual property rights and our confidential information, our business will suffer.&emsp;

rely primarily on a combination of nondisclosure agreements and other contractual provisions and patent, trade secret and copyright

laws to protect our technology and intellectual property.

If we fail to protect our technology and intellectual property, our licensees

and others may seek to use our technology and intellectual property without the payment of license fees and royalties, which could

weaken our competitive position, reduce our operating results and increase the likelihood of costly litigation.

The growth of our

business depends in large part on our ability to secure intellectual property rights in a timely manner, our ability to convince

third parties of the applicability of our intellectual property rights to their products, and our ability to enforce our intellectual

property rights.

In certain instances, we attempt to obtain patent protection for portions of our technology, and our license agreements

typically include both issued patents and pending patent applications as well as our proprietary know-how.

If we fail to obtain

patents in a timely manner or if the patents issued to us do not cover all of the inventions disclosed in our patent applications,

others could use portions of our technology and intellectual property without the payment of license fees and royalties.

We also rely on trade

secret laws rather than patent laws to protect other portions of our proprietary technology.

However, trade secrets can be difficult

for us to verify royalty amounts owed to us under our licensing agreements, and this may cause us to lose revenues.

endeavor to provide that the terms of our license agreements require our licensees to document their use of our technology and report

related data to us on a regular basis.

We will endeavor to provide that the terms of our license agreements give us the right to audit

books and records of our licensees to verify this information, however audits can be expensive, time consuming, and may not be cost justified

based on our understanding of our licensees’ businesses.

We will endeavor to audit certain licensees to review the accuracy of the

information contained in their royalty reports in an effort to decrease the likelihood that we will not receive the royalty revenues to

which we are entitled under the terms of our license agreements, but we cannot give assurances that such audits will be effective to that

Our business operations

could suffer in the event of information technology systems’ failures or security breaches .

While we believe that we

have implemented adequate security measures within our internal information technology and networking systems, our information technology

systems may be subject to security breaches, damages from computer viruses, natural disasters, terrorism, and telecommunication failures.

Any system failure or security breach could cause interruptions in our operations, including but not limited to our technology computer-aided

design, or TCAD, modeling using Synopsys software, in addition to the possibility of losing proprietary information and trade secrets.

To the extent that any disruption or security breach results in inappropriate disclosure of our confidential information, our competitive

position may be adversely affected, and we may incur liability or additional costs to remedy the damages caused by these disruptions or

security breaches.

If integrated

circuits incorporating our technologies are used in defective products, we may be subject to product liability or other claims.

our MST technology is used in defective or malfunctioning products, we could be sued for damages, especially if the defect or malfunction

causes physical harm to people.

While we will endeavor to carry product liability insurance, contractually limit our liability and obtain

indemnities from our customers, there can be no assurance that we will be able to obtain insurance at satisfactory rates or in adequate

amounts or that any insurance and customer indemnities will be adequate to defend against or satisfy any claims made against us.

associated with legal proceedings are typically high, relatively unpredictable and not completely within our control.

Even if we consider

any such claim to be without merit, significant contingencies may exist, similar to those summarized in the above risk factor concerning

intellectual property litigation, which could lead us to settle the claim rather than incur the cost of defense and the possibility of

an adverse judgment.

Product liability claims in the future, regardless of their ultimate outcome, could have a material adverse effect

on our business, financial condition and reputation, and on our ability to attract and retain licensees and customers.

Risks Related to Intellectual Property

If we fail to protect

and enforce our intellectual property rights and our confidential information, our business will suffer.

We rely primarily

on a combination of nondisclosure agreements and other contractual provisions and patent, trade secret and copyright laws to protect our

technology and intellectual property.

If we fail to protect our technology and intellectual property, our licensees and others may seek

to use our technology and intellectual property without the payment of license fees and royalties, which could weaken our competitive

position, reduce our operating results and increase the likelihood of costly litigation.

The growth of our business depends in large part

on our ability to secure intellectual property rights in a timely manner, our ability to convince third parties of the applicability of

our intellectual property rights to their products, and our ability to enforce our intellectual property rights.

In certain instances,

we attempt to obtain patent protection for portions of our technology, and our license agreements typically include both issued patents

and pending patent applications as well as our proprietary know-how.

If we fail to obtain patents in a timely manner or if the patents

issued to us do not cover all of the inventions disclosed in our patent applications, others could use portions of our technology and

intellectual property without the payment of license fees and royalties.

We also rely on trade secret

laws rather than patent laws to protect other portions of our proprietary technology.

However, trade secrets can be difficult to protect.

The misappropriation of our trade secrets or other proprietary information could seriously harm our business.

our proprietary technology and processes, in part, through confidentiality agreements with our employees, consultants, suppliers

and customers.

We cannot be certain that these contracts have not been and will not be breached, that we will be able to timely

detect unauthorized use or transfer of our technology and intellectual property, that we will have adequate remedies for any breach,

or that our trade secrets will not otherwise become known or be independently discovered by competitors.

If we fail to use these

mechanisms to protect our technology and intellectual property, or if a court fails to enforce our intellectual property rights,

our business will suffer.

We cannot be certain that these protection mechanisms can be successfully asserted in the future or will

not be invalidated or challenged.

Further, the laws and

enforcement regimes of certain countries do not protect our technology and intellectual property to the same extent as do the laws

and enforcement regimes of the U.S.

In certain jurisdictions, we may be unable to protect our technology and intellectual property

adequately against unauthorized use, which could adversely affect our business.

We protect our proprietary

technology and processes, in part, through confidentiality agreements with our employees, consultants, suppliers and customers.

be certain that these contracts have not been and will not be breached, that we will be able to timely detect unauthorized use or transfer

of our technology and intellectual property, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise

become known or be independently discovered by competitors.

If we fail to use these mechanisms to protect our technology and intellectual

property, or if a court fails to enforce our intellectual property rights, our business will suffer.

We cannot be certain that these protection

mechanisms can be successfully asserted in the future or will not be invalidated or challenged.

Further, the laws and enforcement

regimes of certain countries do not protect our technology and intellectual property to the same extent as do the laws and enforcement

regimes of the U.S.

In certain jurisdictions, we may be unable to protect our technology and intellectual property adequately against

unauthorized use, which could adversely affect our business.

A court invalidation

or limitation of our key patents could significantly harm our business .

Our patent portfolio contains some patents that

are particularly significant to our MST technology.

If any of these key patents are invalidated, or if a court limits the scope

of the claims in any of these key patents, the likelihood that companies will take new licenses and that any current licensees

will continue to agree to pay under their existing licenses could be significantly reduced.

The resulting loss in license fees

and royalties could significantly harm our business.

Moreover, our stock price may fluctuate based on developments in the course

of ongoing litigation.

We may become

involved in material legal proceedings in the future to enforce or protect our intellectual property rights, which could harm our

From time to time, we may identify products that we believe infringe our patents.

In that event, we expect to

initially seek to license the manufacturer of the infringing products, however if the manufacturer is unwilling to enter into a

license agreement, we may have to initiate litigation to enforce our patent rights against those products.

Litigation stemming

from such disputes could harm our ability to gain new customers, who may postpone licensing decisions pending the outcome of the

litigation or who may, as a result of such litigation, choose not to adopt our technologies.

Such litigation may also harm our

relationships with existing licensees, who may, as a result of such litigation, cease making royalty or other payments to us or

challenge the validity and enforceability of our patents or the scope of our license agreements.

In addition, the costs

associated with legal proceedings are typically high, relatively unpredictable and not completely within our control.

may be materially higher than expected, which could adversely impair our working capital, affect our operating results and lead

to volatility in the price of our common stock.

Whether or not determined in our favor or ultimately settled, litigation would

divert our managerial, technical, legal and financial resources from our business operations.

Furthermore, an adverse decision

in any of these legal actions could result in a loss of our proprietary rights, subject us to significant liabilities, require

us to seek licenses from others, limit the value of our licensed technology or otherwise negatively impact our stock price or our

business and financial position, results of operations and cash flows.

Even if we prevail

in our legal actions, significant contingencies may exist to their settlement and final resolution, including the scope of the

liability of each party, our ability to enforce judgments against the parties, the ability and willingness of the parties to make

any payments owed or agreed upon and the dismissal of the legal action by the relevant court, none of which are completely within

Parties that may be obligated to pay us royalties could be insolvent or decide to alter their business activities

or corporate structure, which could affect our ability to collect royalties from such parties.

Our technologies

may infringe on the intellectual property rights of others, which could lead to costly disputes or disruptions .

Our patent portfolio contains some patents that are particularly

significant to our MST technology.

If any of these key patents are invalidated, or if a court limits the scope of the claims in any of

these key patents, the likelihood that companies will take new licenses and that any current licensees will continue to agree to pay under

their existing licenses could be significantly reduced.

The resulting loss in license fees and royalties could significantly harm our

Moreover, our stock price may fluctuate based on developments in the course of ongoing litigation.

We may become involved

in material legal proceedings in the future to enforce or protect our intellectual property rights, which could harm our business.

time to time, we may identify products that we believe infringe our patents.

In that event, we expect to initially seek to license the

manufacturer of the infringing products, however if the manufacturer is unwilling to enter into a license agreement, we may have to initiate

litigation to enforce our patent rights against those products.

Litigation stemming from such disputes could harm our ability to gain

new customers, who may postpone licensing decisions pending the outcome of the litigation or who may, as a result of such litigation,

choose not to adopt our technologies.

Such litigation may also harm our relationships with existing licensees, who may, because of such

litigation, cease making royalty or other payments to us or challenge the validity and enforceability of our patents or the scope of our

license agreements.

In addition, the costs associated

with legal proceedings are typically high, relatively unpredictable and not completely within our control.

These costs may be materially

higher than expected, which could adversely impair our working capital, affect our operating results and lead to volatility in the price

of our common stock.

Whether or not determined in our favor or ultimately settled, litigation would divert our managerial, technical,

legal and financial resources from our business operations.

Furthermore, an adverse decision in any of these legal actions could result

in a loss of our proprietary rights, subject us to significant liabilities, require us to seek licenses from others, limit the value of

our licensed technology or otherwise negatively impact our stock price or our business and financial position, results of operations and

Even if we prevail in our

legal actions, significant contingencies may exist to their settlement and final resolution, including the scope of the liability of each

party, our ability to enforce judgments against the parties, the ability and willingness of the parties to make any payments owed or agreed

upon and the dismissal of the legal action by the relevant court, none of which are completely within our control.

Parties that may be

obligated to pay us royalties could be insolvent or decide to alter their business activities or corporate structure, which could affect

our ability to collect royalties from such parties.

Our technologies may

infringe on the intellectual property rights of others, which could lead to costly disputes or disruptions .

The semiconductor

industry is characterized by frequent allegations of intellectual property infringement.

Any allegation of infringement could be

time consuming and expensive to defend or resolve, result in substantial diversion of management resources, cause suspension of

operations or force us to enter into royalty, license, or other agreements rather than dispute the merits of such allegation.

third parties making such claims may be able to obtain injunctive or other equitable relief that could block our ability to further

develop or commercialize some or all of our technologies, and the ability of our customers to develop or commercialize their products

incorporating our technologies, in the U.S.

If patent holders or other holders of intellectual property initiate legal

proceedings, we may be forced into protracted and costly litigation.

We may not be successful in defending such litigation and

may not be able to procure any required royalty or license agreements on acceptable terms or at all.

If we are unable

to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in

decreased productivity.

If our MST proves to be commercially valuable, it is likely that we will experience a rapid growth

phase that could place a significant strain on our managerial, administrative, technical, operational and financial resources.

Our organization, procedures and management may not be adequate to fully support the expansion of our operations or the efficient

execution of our business strategy.

If we are unable to manage future expansion effectively, our business, operations and financial

condition may suffer significantly, resulting in decreased productivity.

If integrated

circuits incorporating our technologies are used in defective products, we may be subject to product liability or other claims.

If our MST technology is used in defective or malfunctioning products, we could be sued for damages, especially if the

defect or malfunction causes physical harm to people.

While we will endeavor to carry product liability insurance, contractually

limit our liability and obtain indemnities from our customers, there can be no assurance that we will be able to obtain insurance

at satisfactory rates or in adequate amounts or that any insurance and customer indemnities will be adequate to defend against

or satisfy any claims made against us.

The costs associated with legal proceedings are typically high, relatively unpredictable

and not completely within our control.

Even if we consider any such claim to be without merit, significant contingencies may exist,

similar to those summarized in the above risk factor concerning intellectual property litigation, which could lead us to settle

the claim rather than incur the cost of defense and the possibility of an adverse judgment.

Product liability claims in the future,

regardless of their ultimate outcome, could have a material adverse effect on our business, financial condition and reputation,

and on our ability to attract and retain licensees and customers.

Any allegation of infringement could be time

consuming and expensive to defend or resolve, result in substantial diversion of management resources, cause suspension of operations

or force us to enter into royalty, license, or other agreements rather than dispute the merits of such allegation.

Furthermore, third

parties making such claims may be able to obtain injunctive or other equitable relief that could block our ability to further develop

or commercialize some or all of our technologies, and the ability of our customers to develop or commercialize their products incorporating

our technologies, in the U.S.

If patent holders or other holders of intellectual property initiate legal proceedings, we

may be forced into protracted and costly litigation.

We may not be successful in defending such litigation and may not be able to procure

any required royalty or license agreements on acceptable terms or at all.

Risks Related to Owning Our Common Stock

The market price

of our shares may be subject to fluctuation and volatility.

The market price of

our shares may be subject to fluctuation and volatility.

You could lose all or part of your investment .

The market price of our

common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control.

Between January 1,

2021 and February 9, 2022, the reported high and low sales prices of our common stock have ranged from $11.32 to $47.13.

The market price

of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control.

January 1, 2020 and February 5, 2021, the reported high and low sales prices of our common stock have ranged from $2.53 to $43.80.

The market price of our shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are

beyond our control, including, but not limited to:

of our shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including,

but not limited to:

actual or anticipated variations in our results of operations and financial condition;

2 unchanged sentences

announcements of technological innovations by us;

failure by us to achieve a publicly

announced milestone;

failure by us to meet expectations of

investors, some of which may not be within our control or related to our public announcements;

failure by us to achieve a publicly announced milestone;

failure by us to meet expectations of investors, some of which may not be within our control or related to our public announcements;

delays between our expenditures to develop and market new or enhanced technological innovations and the generation of licensing revenue from those innovations;

developments concerning intellectual property rights,

including our involvement in litigation brought by or against us;

changes in the amounts that we spend to develop, acquire

or license new technologies or businesses;

developments concerning intellectual property rights, including our involvement in litigation brought by or against us;

changes in the amounts that we spend to develop, acquire or license new technologies or businesses;

our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future;

3 unchanged sentences

general economic and market conditions and other factors, including factors unrelated to our operating performance.

These factors and any

corresponding price fluctuations may materially and adversely affect the market price of our shares and result in substantial losses

being incurred by our investors.

In the past, following periods of market volatility, public company stockholders have often instituted

securities class action litigation.

If we were involved in securities litigation, it could impose a substantial cost upon us and

divert the resources and attention of our management from our business.

We are an “emerging

growth company”

under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements applicable to

emerging growth companies will make our common stock less attractive to investors .

We are an “emerging growth company,”

as defined in the Jumpstart Our Business Startups Act of 2012 or the JOBS Act, and we may take advantage of certain exemptions

from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”

including, but not limited to:

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments;

extended transition periods available for complying with new or revised accounting standards.

We have chosen to

“opt out”

of the extended transition periods available for complying with new or revised accounting standards, but

we intend to take advantage of all of the other benefits available under the JOBS Act, including the exemptions discussed above.

If some investors find our common stock less attractive as a result of our reliance on these exemptions, there may be a less active

trading market for our common stock and our stock price may be more volatile.

We will remain an

“emerging growth company”

until December 31, 2021.

Our status as

an “emerging growth company”

under the JOBS Act may make it more difficult to raise capital as and when we need it.

Because of the exemptions from various reporting requirements provided to us as an “emerging growth company,”

we may be less attractive to investors and it may be difficult for us to raise additional capital when we need it or on favorable

Investors may be unable to compare our business with other companies in our industry if they believe that our reporting

is not as transparent as other companies in our industry.

We have not paid

dividends in the past and have no immediate plans to pay dividends.

We plan to reinvest all of our earnings, to the extent

we have earnings, to cover operating costs and otherwise become and remain competitive.

We do not plan to pay any cash dividends

with respect to our securities in the foreseeable future.

We cannot assure you that we would, at any time, generate sufficient

surplus cash that would be available for distribution to the holders of our common stock as a dividend.

Therefore, you should not

expect to receive cash dividends on our common stock.

continue to incur significant increased costs as a result of being a public company that reports to the Securities and Exchange

Commission and our management will be required to devote substantial time to meet compliance obligations .

As a public company

reporting to the Securities and Exchange Commission, we incur significant legal, accounting and other expenses that we did not

incur as a private company.

We are subject to reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, as

well as rules subsequently implemented by the Securities and Exchange Commission that impose significant requirements on public

companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate

governance practices.

In addition, on July 21, 2010, the Dodd-Frank Wall Street Reform and Protection Act was enacted.

significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that increased our legal and

financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our

personnel, systems and resources.

Our management and other personnel devote a substantial amount of time to these compliance initiatives.

In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer

liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to

obtain the same or similar coverage.

As a result, it may be more difficult for us to attract and retain qualified people to serve

on our board of directors, our board committees or as executive officers.

We will lose our status as an “emerging growth

company”

on December 31, 2021 and as a result we will be subject to more extensive financial and executive compensation disclosures,

external auditor attestation of internal controls and additional shareholder voting requirements.

These increased disclosure and

audit requirements will increase the burdens on our limited personnel and systems, which we expect will increase our general and

administrative expenses and require additional time to be devoted to legal and financial compliance efforts.

These factors and any corresponding

price fluctuations may materially and adversely affect the market price of our shares and result in substantial losses being incurred

by our investors.

In the past, following periods of market volatility, public company stockholders have often instituted securities class

action litigation.

If we were involved in securities litigation, it could impose a substantial cost upon us and divert the resources and

attention of our management from our business.

We have not paid dividends

in the past and have no immediate plans to pay dividends.

We plan to reinvest all of our earnings, to the extent we have earnings,

to cover operating costs and otherwise become and remain competitive.

We do not plan to pay any cash dividends with respect to our securities

in the foreseeable future.

We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for

distribution to the holders of our common stock as a dividend.

Therefore, you should not expect to receive cash dividends on our common

We expect to continue

to incur significant increased costs as a result of being a public company that reports to the Securities and Exchange Commission and

our management will be required to devote substantial time to meet compliance obligations .

As a public company reporting to the

Securities and Exchange Commission, we incur significant legal, accounting and other expenses that we did not incur as a private company.

We are subject to reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented

by the Securities and Exchange Commission that impose significant requirements on public companies, including requiring establishment

and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

In addition, on July 21,

2010, the Dodd-Frank Wall Street Reform and Protection Act was enacted.

There are significant corporate governance and executive compensation-related

provisions in the Dodd-Frank Act that increased our legal and financial compliance costs, make some activities more difficult, time-consuming

or costly and may also place undue strain on our personnel, systems and resources.

Our management and other personnel devote a substantial

amount of time to these compliance initiatives.

Our charter documents

1 unchanged sentence

Provisions of our certificate of incorporation

and bylaws and applicable provisions of Delaware law may delay or discourage transactions involving an actual or potential change

in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their

shares, or transactions that our stockholders might otherwise deem to be in their best interests.

The provisions in our certificate

of incorporation and bylaws:

and bylaws and applicable provisions of Delaware law may delay or discourage transactions involving an actual or potential change in control

or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions

that our stockholders might otherwise deem to be in their best interests.

The provisions in our certificate of incorporation and bylaws:

limit who may call stockholder meetings;

3 unchanged sentences

provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.

In addition, Section

203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially

owns 15% or more of our outstanding voting stock unless certain conditions are satisfied.

This restriction lasts for a period of

three years following the share acquisition.

These provisions may have the effect of entrenching our management team and may deprive

you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices.

This potential inability

to obtain a control premium could reduce the price of our common stock.

In addition, Section 203 of

the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15%

or more of our outstanding voting stock unless certain conditions are satisfied.

This restriction lasts for a period of three years following

the share acquisition.

These provisions may have the effect of entrenching our management team and may deprive you of the opportunity

to sell your shares to potential acquirers at a premium over prevailing prices.

This potential inability to obtain a control premium could

reduce the price of our common stock.

Our bylaws designate

the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by

our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial forum for disputes with the

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court

of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought

on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees

to us or our stockholders, (iii) any action asserting a claim against us or any our directors, officers or other employees arising

pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws, or (iv) any action

asserting a claim against us or any our directors, officers or other employees governed by the internal affairs doctrine.

forum selection provision in our bylaws may limit our stockholders’

ability to obtain a favorable judicial forum for disputes

with us or any our directors, officers or other employees.

directors may issue blank check preferred stock, which may affect the voting rights of our holders and could deter or delay an

attempt to obtain control of us.

Our board of directors is authorized, without stockholder approval, to issue preferred

stock in series and to fix and state the voting rights and powers, designation, preferences and relative, participating, optional

or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof.

stock may rank prior to our common stock with respect to dividends rights, liquidation preferences, or both, and may have full

or limited voting rights.

If issued, such preferred stock would increase the number of outstanding shares of our capital stock,

adversely affect the voting power of holders of our common stock and could have the effect of deterring or delaying an attempt

to obtain control of us.

the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders,

which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with the Company .

bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware

shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim

of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting

a claim against us or any our directors, officers or other employees arising pursuant to any provision of the Delaware General Corporation

Law or our certificate of incorporation or bylaws, or (iv) any action asserting a claim against us or any our directors, officers or other

employees governed by the internal affairs doctrine.

This forum selection provision in our bylaws may limit our stockholders’ ability

to obtain a favorable judicial forum for disputes with us or any our directors, officers or other employees.

Our board of directors

may issue blank check preferred stock, which may affect the voting rights of our holders and could deter or delay an attempt to obtain

control of us.

Our board of directors is authorized, without stockholder approval, to issue preferred stock in series and to fix

and state the voting rights and powers, designation, preferences and relative, participating, optional or other special rights of the

shares of each such series and the qualifications, limitations and restrictions thereof.

Preferred stock may rank prior to our common

stock with respect to dividends rights, liquidation preferences, or both, and may have full or limited voting rights.

If issued, such

preferred stock would increase the number of outstanding shares of our capital stock, adversely affect the voting power of holders of

our common stock and could have the effect of deterring or delaying an attempt to obtain control of us.

Unresolved Staff Comments

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-K

Item 1A. Risk Factors