What changed in this filing

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Item 1A. Risk Factors

2023-02-15 compared with 2022-02-15 · 215 added, 222 removed, 198 unchanged (69% 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.

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,

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

our success in capitalizing on the achievement of the technical milestones in our first JDA in order to enter into one or more distribution and royalty agreements with business units of that JDA customer as well as our success in meeting technical milestones in the JDA with our second JDA customer;

our ability to successfully operate, the epitaxial deposition reactor for processing 300mm wafers, together with supporting equipment, 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.

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.

Investors should evaluate an investment

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

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, 2022 and

2021, we have incurred net losses of approximately $17.4 million and $15.7 million, respectively, and our operations have used approximately

$12.5 million and $12.4 million of cash, respectively.

As of December 31, 2022, we had an accumulated deficit of approximately $183.3

$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

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plan or continue operations.

While we have

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 .

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

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.

While we have entered into

four integration license agreements and two joint development agreements, there can be no assurance that any of these relationships will

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

In September and October 2018, respectively,

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

In October 2019, we entered into a license

agreement with a leading RF semiconductor supplier.

In December 2021, we entered into a JDA with a leading semiconductor manufacturer.

In February 2022, we entered into an integration license agreement with a semiconductor foundry.

In April 2022 we entered into a JDA with

a major semiconductor foundry.

Our integration 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 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 first JDA customer paid us for a manufacturing license in the first quarter

of 2021 when we delivered our MST recipe to them.

In February 2022, we successfully achieved all the development milestones in the JDA

resulting in additional revenue.

Nevertheless, neither of our JDAs commits the customers 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.

suffered a total loss of one of its fabs due to a fire, impacting their production capability and 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.

AKM subsequently decided not to resume manufacturing at that site.

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 as AKM has

moved production previously carried out in the Nobeoka fab to an external foundry.

We expect that our product

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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,

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

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

While we believe our JDAs 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.

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.

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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 a royalty-based business model, which is inherently risky.

2022 exceeded $550 billion in sales, and over the past three years the industry has been characterized by product shortages as strong

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

Although these supply/demand imbalances and

tight capacity conditions have eased in recent months, 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’ 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 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 long-term success of our business

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the timing of receipt of royalty reports and the applicable revenue recognition criteria, which may result in fluctuation in our results of operations.

We may need additional

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

We may need additional financing

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

of December 31, 2022, we had total assets of approximately $26.7 million, cash and cash-equivalents of approximately $21.2 million

and working capital of approximately $18.7 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.

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 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

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.

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.

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

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 end.

Our business operations

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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.

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.

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

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.

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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.

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.

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

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

We protect 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.

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unauthorized use, which could adversely affect our business.

A court invalidation

or limitation of our key patents could significantly harm 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

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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.

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.

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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.

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.

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.

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,

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, 2022 and

February 8, 2023, the reported high and low sales prices of our common stock have ranged from $5.75 to $21.28.

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

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:

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the trading volume of our shares;

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

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

These factors and any corresponding

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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.

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.

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,

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amount of time to these compliance initiatives.

Our charter documents

and Delaware law may inhibit a takeover that stockholders consider favorable .

Our charter documents and

Delaware law may inhibit a takeover that stockholders consider favorable .

Provisions of our certificate of incorporation

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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.

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

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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,

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 Company .

7 unchanged sentences

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.

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

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