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Item 1A. Risk Factors

2025-03-04 compared with 2024-02-15 · 202 added, 217 removed, 281 unchanged (60% 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 our license agreement with ST through the qualification phase, complete the distribution license milestone with ST and earn the corresponding license fee and subsequently reach the phase in which ST ships royalty-bearing products, which is core to our business model;

our ability to advance the licensing arrangements Asahi Kasei Microdevices, our foundry licensee and our RF licensee, to manufacturing and distribution licenses and to shipment of royalty-bearing products;

our ability to advance our license agreement with ST through the qualification phase, complete the HVM license milestone with ST and earn the corresponding license fee and subsequently reach the phase in which ST ships royalty-bearing products, which is core to our business model;

our ability to advance the licensing arrangements with our RF licensee and our foundry licensee to R&D and HVM licenses and to shipment of royalty-bearing products;

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 convert

licensees of our MSTcad software to licenses of our MST technology under commercial license agreements and to successfully utilize

MSTcad in both internal development and customer evaluations;

our ability to convert licensees of our MSTcad software to licenses of our MST technology under commercial license agreements and to successfully utilize MSTcad in both internal development and customer evaluations;

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, 2023 and 2022, we have incurred net losses of approximately $19.8 million and $17.4 million, respectively, and our operations have

used approximately $14.6 million and $12.5 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, 2024 and

2023, we have incurred net losses of approximately $18.4 million and $19.8 million, respectively, and our operations have used approximately

$13.2 million and $14.6 million of cash, respectively.

As of December 31, 2024, we had an accumulated deficit of approximately $221.5

$203.1 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 and such customers ship sufficient

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

and HVM license agreements with one or more foundries, IDMs or fabless semiconductor manufacturers and such customers ship sufficient

volumes of royalty-bearing products and pay upfront license fees to support our cash requirements.

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or continue operations.

While we have entered

into one commercial license agreement, four integration license agreements and two joint development agreements, there can be no assurance

While we have entered into

one commercial license agreement, 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 .

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

Manufacturing

and distribution agreements such as our license agreement with ST provide for substantially larger upfront license fee payments than integration

and HVM agreements such as our license agreement with ST provide for substantially larger upfront license fee payments than integration

license fees and such agreements require licensees to make royalty payments to us based the number and sales price of MST-enabled products

they sell to their customers.

Our first JDA customer paid us for a manufacturing license in the first quarter of 2021 when we delivered

our MST recipe to them.

Our first JDA customer paid us for an R&D 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.

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ST has successfully installed our MST film recipe and

they have accepted our film under the license agreement, resulting in the grant of a manufacturing license to them for internal use, but

they will now enter a qualification phase and there can be no assurance that our MST technology will deliver the performance, power or

other requirements that ST or our other customers seek for their products or that the integration of our technology with our customers’

manufacturing process will be successful in high volume.

they have accepted our film under the license agreement, resulting in the grant of an R&D license to them enabling them to manufacture

MST wafers for internal use, but there can be no assurance that our MST technology will deliver the performance, power or other requirements

that ST or our other 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’

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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,

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

2023 exceeded $530 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.

2024 exceeded $550 billion in sales.

Over the past three years, some segments of the industry have been characterized by product shortages

as strong demand has outstripped supply, resulting in tight capacity among our potential customers, while other segments have experienced

softness and excess supply as part of the correction of COVID-era supply-chain disruptions .

Although these supply/demand imbalances and

tight capacity conditions have eased throughout 2023, 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 commercial licenses with us.

uneven capacity conditions have started to normalize throughout 2024, 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 commercial licenses with us.

Additionally, we conduct our ongoing research and development

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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 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:

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

Royalty payments under our licenses are generally expected to be based on a percentage of the selling price of wafers made using MST or

the selling price of MST-enabled semiconductor die sold, depending on the customer type and the negotiation of our full commercial license

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:

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;

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

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

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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, 2023, we had total assets of approximately $24.0 million, cash, cash-equivalents and short-term investments

of approximately $19.5 million and working capital of approximately $16.6 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, 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

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 us to achieve material revenue 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.

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, 2024, we had total assets of approximately $29.1 million, cash, cash-equivalents and short-term investments of approximately

$26.8 million and working capital of approximately $23.5 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 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.

Unfavorable geopolitical

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could be adversely affected by conditions in the U.S.

and global economies, the United States and global financial markets and adverse

geopolitical and macroeconomic developments, including inflation rates, the COVID-19 pandemic, the Ukrainian/Russian and Israeli/Palestinian

conflicts and related sanctions, bank failures, and economic uncertainties related to these conditions.

and global economies, the United States and global financial markets, potential

imposition of tariffs, increased export controls and adverse geopolitical and macroeconomic developments, including inflation rates, the

Ukrainian/Russian and Israeli/Palestinian conflicts and related sanctions, bank failures, and economic uncertainties related to these

For example, increased inflation

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that are difficult to predict and may lead to semiconductor industry instability.

Increased restrictions on the availability and use of

critical semiconductor IP and equipment by various foreign entities may limit Atomera’s ability to license our IP in some parts

For example, the U.S.

government has been imposing increasingly

strict export controls, particularly on exports to China, which have already impacted the financial performance and business outlook of

certain semiconductor vendors and vendors of semiconductor manufacturing equipment.

Increased restrictions on the availability and use

of critical semiconductor IP and equipment by various foreign entities may limit Atomera’s ability to license our IP in some parts

of the world.

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position could be harmed and the further development and commercialization of our technology could be delayed.

could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information

be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information

maintained in the information systems and networks of our company and our vendors, including personal or confidential information of our

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attacks or insider threat attacks which could result in financial, legal, business or reputational harm.

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

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.

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

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

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

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

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.

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.

as of January 31, 2024, we lost access to certain semiconductor manufacturing and engineering services which may be difficult and/or

costly to replace.

From April 2016 through January 2024, we worked with TSI Technology Development & Commercialization

Services LLC, or TSI under a Master R&D Services Agreement and a Manufacturing Agreement.

Under these agreements, TSI provided

us with foundry services, consisting of engineering and manufacturing services.

In August 2023, TSI was acquired by Robert Bosch

Semiconductor LLC, or Bosch.

In October 2023, Bosch advised us that on January 31, 2024 it would cease providing engineering and

manufacturing services to third parties, including Atomera, in order to commence the conversion of the TSI fab to production of

Silicon Carbide semiconductor products, As of the date of this Annual Report we are no longer working with TSI.

We are in active

discussions with potential replacement providers of foundry services.

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.

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.

as of January 31, 2024, we lost access to certain semiconductor manufacturing and engineering services which may be difficult and/or costly

From April 2016 through January 2024, we worked with TSI Technology Development & Commercialization Services LLC,

or TSI under a Master R&D Services Agreement and a Manufacturing Agreement.

Under these agreements, TSI provided us with foundry services,

consisting of engineering and manufacturing services.

In August 2023, TSI was acquired by Robert Bosch Semiconductor LLC, or Bosch.

October 2023, Bosch advised us that on January 31, 2024 it would cease providing engineering and manufacturing services to third parties,

including Atomera, in order to commence the conversion of the TSI fab to production of Silicon Carbide semiconductor products.

in active discussions with potential replacement providers of foundry services.

However, there are few foundries that offer R&D services

that are comparable to those provided by TSI, so we may face difficulty in replacing the services that TSI had provided.

utilized TSI’s services for a portion of our internal R&D which required complete semiconductor device fabrication.

wafers sold or licensed to any customer have been fabricated at TSI.

Accordingly, we do not believe that the loss of TSI’s

services will have a meaningful impact on any of our ongoing client engagements.

However, our access to foundry services was

interrupted while we were working to reach an agreement with a replacement foundry and adapt our R&D processes to those used at

our replacement foundry.

This transition may cause us to incur meaningful startup costs, may divert engineering resources from

ongoing R&D activities and may increase our ongoing spending on outsourced engineering services.

The potential inability to

replace the TSI services in a timely manner may have a material adverse effect on the timing and cost of continuing to develop

example applications and devices which exhibit the advantages of our MST technology.

We have utilized

TSI’s services for a portion of our internal R&D which required complete semiconductor device fabrication.

No wafers sold or

licensed to any customer have been fabricated at TSI.

Accordingly, we do not believe that the loss of TSI’s services has had or

will have a meaningful impact on any of our ongoing client engagements.

However, our access to foundry services was interrupted while

we were working to reach an agreement with a replacement foundry and adapt our R&D processes to those used at our replacement foundry.

This transition may cause us to incur meaningful startup costs, may divert engineering resources from ongoing R&D activities and may

increase our ongoing spending on outsourced engineering services.

The potential inability to replace the TSI services may have a material

adverse effect on the timing and cost of continuing to develop example applications and devices which exhibit the advantages of our MST

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 on 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, 2024 and

February 1, 2025, the reported high and low sales prices of our common stock have ranged from $2.31 to $17.55.

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,

2023 and February 1, 2024, the reported high and low sales prices of our common stock have ranged from $4.96 to $10.72.

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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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

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 of 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.

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