What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-02-15 compared with 2021-02-19 · 8 added, 232 removed, 2 unchanged (99% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information

Our common stock trades

on the NASDAQ Capital Market under the symbol “ATOM”.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information

Our common stock trades on

the NASDAQ Capital Market under the symbol “ATOM”.

Holders of Record

As of February 10, 2021, there were 206

holders of record of our common stock.

As of February 9, 2022, there were 169 holders

of record of our common stock.

Dividend Policy

We have never declared

or paid cash dividends on our common stock.

We presently intend to retain earnings, if any, to finance the operation and expansion

of our business.

Selected Financial Data

As a “smaller

reporting company”

under Item 10 of Regulation S-K, we are not required to provide the information under this item.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion

and analysis of the financial condition and results of operations of Atomera Incorporated should be read in conjunction with our

financial statements and the accompanying notes that appear elsewhere in this Annual Report.

Statements in this Annual Report on

Form 10-K include forward-looking statements based upon current expectations that involve risks and uncertainties, such as our

plans, objectives, expectations and intentions.

We use words such as “anticipate,”

“estimate,”

“plan,”

“project,”

“continuing,”

“ongoing,”

“expect,”

“believe,”

“intend,”

“may,”

“will,”

“should,”

“could,”

and similar expressions to identify forward-looking

Although forward-looking statements in this Annual Report reflect the good faith judgment of our management, such statements

can only be based on facts and factors currently known by us.

Consequently, forward-looking statements are inherently subject to

risks, uncertainties, and changes in condition, significance, value and effect, including those risk factors set forth in this

Annual Report.

Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results

to differ materially from those expressed herein and in ways not readily foreseeable.

Readers are urged not to place undue reliance

on these forward-looking statements, which speak only as of the date of this Annual Report and are based on information currently

and reasonably known to us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any

event or circumstance that may arise after the date of this Annual Report.

Readers are urged to carefully review and consider the

various disclosures made in this Annual Report, which attempt to advise interested parties of the risks and factors that may affect

our business, financial condition, results of operations and prospects.

We are engaged in the

business of developing, commercializing and licensing proprietary processes and technologies for the $450+ billion semiconductor

Our lead technology, named Mears Silicon Technology TM , or MST ®

, is a thin film of reengineered

silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.

MST can be applied as a transistor

channel enhancement to CMOS-type transistors, the most widely used transistor type in the semiconductor industry.

MST is our proprietary

and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing

the semiconductor industry.

We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability

and power efficiency.

In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial

scale, with machines commonly used in semiconductor manufacturing.

We believe that MST can be widely incorporated into the most

common types of semiconductor products, including analog, logic, optical and memory integrated circuits.

We do not intend to

design or manufacture integrated circuits directly.

Instead, we develop and license technologies and processes that we believe

offer the designers and manufacturers of integrated circuits a low-cost solution to the industry’s need for greater performance

and lower power consumption.

Our customers and partners include:

foundries, which manufacture integrated circuits on behalf of fabless manufacturers;

integrated device manufacturers, or IDMs, which are the fully integrated designers and manufacturers of integrated circuits;

fabless semiconductor manufacturers, which are designers of integrated circuits that outsource the manufacture of their chips to foundries;

original equipment manufacturers, or OEMs, that manufacture the epitaxial, or EPI, machines used to deposit semiconductor layers, such as the MST film, onto the silicon wafer;

electronic design automation companies, which make tools used throughout the industry to simulate performance of semiconductor products using different materials, design structures and process technologies.

Our commercialization

strategy is to generate revenue through licensing arrangements whereby foundries, IDMs and fabless semiconductor manufacturers

pay us a license fee for their right to use MST technology in the manufacture of silicon wafers as well as a royalty for each silicon

wafer or device that incorporates our MST technology.

To date we have generated revenue from (i) licensing agreements with two

IDMs and one fabless manufacturer and (ii) engineering services provided to foundries, IDMs and fabless companies.

We were organized as

a Delaware limited liability company under the name Nanovis LLC on November 26, 2001.

On March 13, 2007, we converted to a Delaware

corporation under the name Mears Technologies, Inc.

On January 12, 2016, we changed our name to Atomera Incorporated.

On May 30, 2019, we

closed a registered direct offering of 1,675,000 shares of common stock at a price of $4.00 per share, resulting in approximately

$6.4 million of net proceeds to us after deducting placement agent fees and other offering expenses.

On May 15, 2020, we

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

On September 2, 2020,

we entered into an Equity Distribution Agreement with Craig-Hallum Capital Group LLC, as agent, under which we may offer and sell,

from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $25.0 million

in an “at-the-market”

or ATM offering, to or through the agent.

As of December 31, 2020, 2,206,895 shares had been

sold at an average price per share of approximately $11.22, resulting in approximately $24.0 million of net proceeds to us after

deducting commissions and other offering expenses.

Results of Operations for the Years

Ended December 31, 2020 and 2019

date, we have only generated limited revenue from customer engagements for integration engineering services and integration license

In the future, we expect to collect increased fees from license agreements and royalties from customer sales of products

that incorporate our MST technology, subject to our ability to enter into manufacturing and distribution license agreements with

our current and future licensees.

Our integration services consist of depositing our MST film on semiconductor wafers, delivering

such wafers to customers to finalize building devices, and performing tests for customers evaluating MST.

The integration license

agreements we have entered into to date grant the licensees the right to build products that integrate our MST technology deposited

by us onto their semiconductor wafers, but the agreements do not grant the licensees the rights to manufacture on their site or

to sell products incorporating MST.

For revenue recognition purposes, we have determined that the grant of rights in integration

licenses is not distinct from the delivery of integration services, and therefore revenue from both integration licenses and integration

services is recognized as the services are provided to the customer.

In general, this is proportionate to the delivery of MST processed

wafers to the customer, but if the agreements do not specify a time and quantity of wafer delivery, we will record revenue over

the period of time of which we anticipate delivering an estimated quantity of wafers.

Revenue for the years

ended December 31, 2020 and 2019 was approximately $62,000 and $533,000, respectively.

Our revenue in 2020 and 2019 was generated

from integration services engagements and integration license agreements.

Cost of Revenue.

Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration

engineering services.

Cost of revenue was approximately $13,000 and $253,000 for the years ended December 31, 2020 and 2019, respectively.

We anticipate that our cost of revenue will vary substantially depending on the mix of integration license and integration engineering

services and the nature of products and/or services delivered in each customer engagement.

Operating Expenses.

Operating expenses consist of research and development, general and administrative, and selling and marketing expenses.

For the years ended December 31, 2020 and 2019 our operating expenses totaled approximately $15.0 million and $13.9 million, respectively.

development expense.

To date, our operations have focused on the research, development, patent protection, and commercialization

of our processes and technologies related to our MST technology.

Our research and development costs primarily consist of payroll

and benefit costs for our engineering staff and costs of outsourced fabrication and metrology of semiconductor wafers incorporating

our MST technology.

For the years ended

December 31, 2020 and 2019, we incurred approximately $8.4 million and $7.7 million, respectively, of research and development

expense, an increase of approximately $676,000 or 9%.

The increase in research and development expense is primarily due to an increase

of approximately $309,000 stock-based compensation expense and approximately $510,000 in payroll related costs due to headcount

These increases in expenses were offset by an approximately $216,000 decrease in travel costs as a result of halting travel

due to the COVID-19 pandemic.

General and administrative

General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel,

office-related costs and professional fees.

General and administrative costs for the years ended December 31, 2020 and 2019 were

approximately $5.6 million and $5.2 million, respectively, representing an increase of approximately $421,000 or 8%.

is costs was primarily due to an increase in professional fees related to legal and patent fees.

Selling and marketing

Selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel

and business development consulting services.

Selling and marketing expenses for the years ended December 31, 2020 and 2019 were

approximately $921,000 and $954,000, respectively, representing a decrease of approximately $33,000 or 4%.

The decrease in primarily

due to a decrease in travel offset by increase in consulting fees.

Interest income.

Interest income for the years ended December 31, 2020 and 2019 was approximately $42,000 and $325,000, respectively.

income for each period related to interest earned on our cash and cash equivalents.

Interest income for each period related to

interest earned on our cash and cash equivalents.

Interest rates continued to fall during 2020 and while our cash balance grew

substantially in 2020, this was heavily weighted to the end of the year due to the timing of our at-the-market equity financing.

Liquidity and Capital Resources

In May 2019, we closed

a registered direct offering of 1,675,000 shares of common stock at a price of $4.00 per share.

We received approximately $6.4

million of net proceeds after deducting commissions and other offering expenses.

As of December 31,

2020, we had cash and cash equivalents of approximately $37.9 million and working capital of approximately $36.6 million.

year ended December 31, 2020, we had a net loss of approximately $14.9 million and used approximately $12.1 million of cash and

cash equivalents in operations.

Since inception, we have incurred recurring operating losses.

On May 15, 2020, we

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

On September 2, 2020,

we entered into an Equity Distribution Agreement with Craig-Hallum Capital Group LLC, as agent, under which we may offer and sell,

from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $25.0 million

in an “at-the-market”

or ATM offering, to or through the agent.

As of December 31, 2020, 2,206,895 shares have been

sold at an average price per share of approximately $11.22, resulting in approximately $24.0 million of net proceeds to us after

deducting commissions and other offering expenses.

On January 5, 2021 we announced the completion of this offering after an additional

14,680 shares were sold for an average price per share of $16.97, in January 2021 resulting in additional net proceeds of approximately

We believe that our

available working capital is sufficient to fund our presently forecasted working capital requirements for, at least, the next 12

months following the date of the filing of this report.

However, the semiconductor industry is generally slow to adopt new manufacturing

process technologies and conducts long testing and qualification processes which we have limited ability to control, and there

can be no assurance of the timing of our receipt of meaningful amounts of revenue.

Our future capital

requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize

our MST technology, competing technological and market developments, and the need to enter into collaborations with other companies

or acquire technologies to enhance or complement our current offerings.

If we are not able to generate sufficient revenue from

license fees and royalties in a timeframe that satisfies our cash needs, we will need to raise more capital.

In the event we require

additional capital, we will endeavor to acquire additional funds through various financing sources, including follow-on equity

offerings, debt financing and joint ventures with industry partners.

In addition, we will consider alternatives to our current

business plan that may enable to us to achieve revenue-producing operations and meaningful commercial success with a smaller amount

If we are unable to secure additional capital, we may be required to curtail our research and development initiatives

and take additional measures to reduce costs in order to conserve its cash.

Cash Flows from Operating, Investing

and Financing Activities:

Net cash used

in operating activities of approximately $12.1 million for year ended December 31, 2020 resulted primarily from our net loss of

approximately $14.9 million adjusted by approximately $3.0 million for stock-based compensation expense.

Net cash used in operating

activities of approximately $10.4 million for year ended December 31, 2019 resulted primarily from our net loss of approximately

$13.3 million adjusted by approximately $2.9 million for stock-based compensation expense.

Net cash used by investing

activities of approximately $131,000 and approximately $51,000 for the years ended December 31, 2020 and 2019, respectively, consisted

of the purchase of property and equipment.

In 2020, we refurnished our offices in Los Gatos, California and also purchased lab

equipment to be used in connection with an epi tool that we plan to lease in Tempe, Arizona .

Net cash provided

by financing activities of approximately $35.3 million for the year ended December 31, 2020 related to the net proceeds from our

underwritten public offering of common stock in May 2020 and our at-the-market offering beginning in September 2020 and continuing

through the end of 2020.

Net cash provided by

financing activities of approximately $6.4 million for the year ended December 31, 2019 related to the net proceeds from our registered

direct offering in May 2019.

Off-Balance Sheet Arrangements

We have not entered into off-balance sheet

arrangements or issued guarantees to third parties.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

We have never declared or

paid cash dividends on our common stock.

We presently intend to retain earnings, if any, to finance the operation and expansion of our

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 5. Market for Registrant’s Common Equity