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What changed in Atomera Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Atomera Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+152 added−157 removedSource: 10-K (2024-12-31) vs 10-K (2024-02-15)

Top changes in Atomera Inc's 2024 10-K

152 paragraphs added · 157 removed · 129 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

55 edited+15 added−18 removed55 unchanged
Biggest changeOur business model is to enter into licensing arrangements whereby foundries and IDMs pay us a license fee for their use of MST technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer (in the case of foundries) or device (in the case of IDMs) that they sell that incorporates MST.
Biggest changeOur customers and partners include foundries, integrated device manufacturers, or IDMs, fabless semiconductor manufacturers, OEMs that manufacture epitaxial deposition tools (also known as epi machines), and electronic design automation software companies, such as Synopsys. 5 Our business model is to enter into licensing arrangements whereby foundries and IDMs pay us a license fee for their use of MST technology in the manufacture of silicon wafers as well as a royalty for each product.
We utilize this tool to perform deposition on both customer and internal R&D wafers. The terms of our tool lease include the lessor’s maintenance and support as well as access to a cleanroom with advanced cleaning and inspection tools. 5 MST Commercialization We do not intend to design or manufacture integrated circuits directly.
We utilize this tool to perform deposition on both customer and internal R&D wafers. The terms of our tool lease include the lessor’s maintenance and support as well as access to a cleanroom with advanced cleaning and inspection tools. MST Commercialization We do not intend to design or manufacture integrated circuits directly.
Prior to enabling a customer to install and use MST technology on epitaxial deposition machines in their own fab, we require execution of a manufacturing license which grants rights limited to manufacturing MST-enabled products for internal R&D and qualification but does not give the customer the right to distribute or sell products that use MST.
Prior to enabling a customer to install and use MST technology on epitaxial deposition machines in their own fab, we require execution of an R&D license which grants rights limited to manufacturing MST-enabled products for internal R&D and qualification but does not give the customer the right to distribute or sell products that use MST.
Transistors are the building blocks of integrated circuits and the most complex semiconductor chips today contain more than a billion transistors, each of which may have features that are much less than 1/1,000 th the diameter of a human hair. The most widely used transistors in semiconductor chips today are based on CMOS technology.
Transistors are the building blocks of integrated circuits and the most complex semiconductor chips today contain more than 100 billion transistors, each of which may have features that are much less than 1/1,000 th the diameter of a human hair. The most widely used transistors in semiconductor chips today are based on CMOS technology.
In order to progress beyond this phase, we must demonstrate benefits at a commercially significant level. It is difficult for both customers and for Atomera to estimate the amount of time a customer will be in the integration phase. 6 4. Process Installation .
In order to progress beyond this phase, we must demonstrate benefits at a commercially significant level. It is difficult for both customers and for Atomera to estimate the amount of time a customer will be in the integration phase. 4. Process Installation .
We intend that each of our integration license agreements and JDAs will result in full commercial licenses like our April 2023 agreement with ST which provides for substantially larger upfront license fee payments for grants of manufacturing and distribution rights than the integration licenses and will require royalty payments to us based on sales of MST-enabled products they sell to their customers.
We intend that each of our integration license agreements and JDAs will result in full commercial licenses like our license agreement with ST which provides for substantially larger upfront license fee payments for grants of manufacturing and distribution rights than the integration licenses and will require royalty payments to us based on sales of MST-enabled products they sell to their customers.
In addition, patents may not issue from any of our current or future applications. We also hold registered trademarks in the United States for the marks “Atomera,” “MST” and “MSTcad” and in China for the mark “Mears”. Employees and Human Capital Management As of the date of this Annual Report, we employ 21 people on a full-time basis.
In addition, patents may not issue from any of our current or future applications. We also hold registered trademarks in the United States for the marks “Atomera,” “MST” and “MSTcad” and in China for the mark “Mears”. Employees and Human Capital Management As of the date of this Annual Report, we employ 20 people on a full-time basis.
Item 1. Business Company Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $530+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.
Item 1. Business Company Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $550+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.
The SEC also maintains an internet site that contains reports and other information regarding our filings at www.sec.gov.
The SEC also maintains an internet site that contains reports and other information regarding our filings at www.sec.gov. 9
As of the date of this Annual Report, we have done technology simulation work with universities and leading industry players at nodes from 180nm to 5nm.
As of the date of this Annual Report, we have done technology simulation work with universities and leading industry players at nodes from 180nm to 2nm.
We believe this collaboration and integration of externally-developed IP benefits semiconductor companies by enabling them to bring new technology to market faster and more cost-effectively. 3 Applications of Mears Silicon Technology The initial applications of MST are for power devices, RFSOI devices and advanced CMOS integrated circuits.
We believe this collaboration and integration of externally-developed IP benefits semiconductor companies by enabling them to bring new technology to market faster and more cost-effectively. 3 Applications of Mears Silicon Technology Among the initial applications for which MST can provide technology differentiation are in power devices, RFSOI devices and advanced CMOS integrated circuits.
Under this JDA, we granted our customer a paid manufacturing license pursuant to which the customer installed the recipe for our MST film into a tool in their fab and was authorized to fabricate semiconductor wafers incorporating MST for internal use, resulting in this customer entering Phase Four.
Under this JDA, we granted our customer a paid manufacturing license pursuant to which the customer installed the recipe for our MST film into a tool in their fab and was authorized to fabricate semiconductor wafers incorporating MST for internal use, resulting in this customer entering Phase Four. This JDA also included development milestones that we achieved.
Until recently, the industry succeeded at maintaining the rate of improvement predicted by Moore’s Law by scaling the key transistor parameters, such as shrinking feature sizes and reducing operating voltages, thereby allowing more transistors to be packed onto a single microchip. This trend was facilitated in large part by the development of CMOS technologies.
Until recently, the industry succeeded at maintaining the rate of improvement predicted by Moore’s Law by scaling the key transistor parameters, such as shrinking feature sizes and reducing operating voltages, thereby allowing more transistors to be packed onto a single microchip.
Although this JDA does not confer commercial distribution rights, we believe that successful achievement of the JDA milestones is a significant step toward commercialization, as it should facilitate progress toward integrating MST into one or more of our customer’s multiple production lines and thus provide opportunities for additional license revenues and potential royalty streams.
We continue to work with this customer and, although this JDA does not confer commercial distribution rights, we believe that successful achievement of the JDA milestones is a significant step toward commercialization, as it should facilitate progress toward integrating MST into one or more of our customer’s multiple production lines, each of which can provide license revenues and royalty streams.
The customer will conduct additional testing to ensure that the new products developed with the new PDK achieve manufacturing reliability under accelerated test conditions that simulate volume production. Upon successfully completing the qualification phase, products can be built and shipped using this manufacturing process. 6. Production .
The customer will conduct additional testing to ensure that the new products developed with the new PDK achieve manufacturing reliability under accelerated test conditions that simulate volume production. Upon successful completion of the qualification phase and execution of a high volume manufacturing (HVM) license with Atomera, products can be built and shipped using this manufacturing process. 6. Production .
We also dedicate research and development resources to evolving and expanding our technology to address new process technologies in the semiconductor industry roadmap. Our research and development is conducted internally, but we work closely with third parties in the semiconductor industry to evaluate and qualify our technology for incorporation into semiconductor products and fabrication equipment.
Our research and development is conducted internally, but we work closely with third parties in the semiconductor industry to evaluate and qualify our technology for incorporation into semiconductor products and fabrication equipment.
We believe that our success depends in part on our ability to achieve the following in a cost-effective and timely manner: · enable customers to integrate MST into their products; · develop new technologies that meet the changing needs of the semiconductor industry; · improve our existing technologies to enable growth into new application areas; and · expand our intellectual property portfolio.
During the years ended December 31, 2024 and 2023, we incurred research and development expenses of approximately $11.0 million and $12.5 million, respectively. 8 We believe that our success depends in part on our ability to achieve the following in a cost-effective and timely manner: · enable customers to integrate MST into their products; · develop new technologies that meet the changing needs of the semiconductor industry; · improve our existing technologies to enable growth into new application areas; and · expand our intellectual property portfolio.
As applied to CMOS-type transistors, MST functions as a transistor channel enhancement. We believe MST has the potential to overcome the key challenges found in the implementation of next generation nano-scale semiconductor devices incorporating CMOS type transistors, namely enhancing drive current, reducing gate leakage and reducing variability.
CMOS integrated circuits are the most widely used type of integrated circuits in the semiconductor industry. We believe MST has the potential to overcome the key challenges found in the implementation of next-generation nano-scale semiconductor devices incorporating CMOS type transistors, namely enhancing drive current, reducing leakage and reducing variability.
Accordingly, we have engaged with certain customers under joint development agreements, or JDAs. Our JDAs include development, technology transfer, manufacturing and licensing components. To date, application of our MST technology has been for power devices, RFSOI devices and advanced CMOS integrated circuits. CMOS integrated circuits are the most widely used type of integrated circuits in the semiconductor industry.
We have engaged with certain customers under joint development agreements, or JDAs. Our JDAs include development, technology transfer, manufacturing and licensing components. To date, applications of our MST technology have primarily been for power devices, RFSOI devices and advanced CMOS integrated circuits including logic and memory.
At the same time, the increasing use of electronics in cars, buildings, appliances and other consumer products is creating a broad landscape of “smart” devices such as wearable technologies and The Internet of Things.
At the same time, the increasing use of electronics in cars, buildings, appliances and other consumer products is creating a broad landscape of “smart” devices such as wearable technologies and The Internet of Things. Artificial Intelligence (AI) is being widely adopted by both the enterprise and consumer, and the infrastructure required for the processing of AI workloads is considerable.
We market our MST technology directly to the semiconductor industry through our significant industry contacts and relationships. We also sponsor academic research and participate in industry conferences and associations.
We market our MST technology directly to the semiconductor industry through our significant industry contacts and relationships. We also sponsor academic research and participate in industry conferences and associations. In certain foreign jurisdictions, we engage sales representatives to assist us in establishing relationships with local customers.
There can be no assurance, however, that ST will complete their qualification and proceed to commercial sale of MST-enabled products. In January 2021, we entered into a JDA with a leading semiconductor provider for integration of our MST technology into their manufacturing process.
There can be no assurance, however, that ST will complete its process qualification and pursue the licensed rights through to the commercial manufacture and sale of MST-enabled products. We have two JDAs in place. The first is with a leading semiconductor provider for integration of our MST technology into their manufacturing process.
We deposit MST onto the customers’ wafers and the customer has the right under the license agreement to complete the manufacturing process, which enables them to evaluate our technology and to provide limited samples to their customers. AKM, our fabless licensee and our foundry licensee are in our Phase Three (MST Integration).
Under these integration license agreements, customers have paid us for the right to evaluate MST technology, which is integrated onto their semiconductor wafers. We deposit MST onto the customers’ wafers and the customer has the right under the license agreement to complete the manufacturing process, which enables them to evaluate our technology and to provide limited samples to their customers.
In the case of fabless semiconductor licensees, our strategy is to charge a royalty for each device they sell that incorporates our MST technology. The primary beneficiaries of our commercialization activities are the IDMs and fabless semiconductor manufacturers, as they produce and distribute integrated circuit devices which are enhanced when they incorporate MST technology.
The primary beneficiaries of our commercialization activities are the IDMs and fabless semiconductor manufacturers, as they produce and distribute integrated circuit devices which are enhanced when they incorporate MST technology.
In the case of our employees and consultants, the agreements provide that all of the technology that is conceived by the individual during the course of employment is our exclusive property.
In the case of our employees and consultants, the agreements provide that all of the technology that is conceived by the individual during the course of employment is our exclusive property. The development of our technology and many of our processes are dependent upon the knowledge, experience, and skills of key scientific and technical personnel.
While the above steps describe a model customer engagement, we have engaged with some customers in ways that do not follow this precise order. JDAs are an example of an engagement format that may combine engineering service, development, manufacturing, process optimization and other joint activities that do not follow the order described above.
JDAs are an example of an engagement format that may combine engineering service, development, manufacturing, process optimization and other joint activities that do not follow the order described above.
The April 2023 license agreement is based around two major milestones, namely the grant of a manufacturing license upon installation of MST in ST’s fab and qualification of an MST-enabled process.
Our standard model is based around two major milestones, namely the installation of MST in a customer’s fab and qualification of an MST-enabled process. Our license agreement with ST is our first grant of commercial manufacturing and distribution rights.
A manufacturing license, granting our customer the rights to install MST on a tool in their fab and to manufacture MST-enabled products for internal use only; and 3.
An R&D license, which includes the rights granted in an integration license and grants our customer the rights to install MST on a tool in their fab and to manufacture MST-enabled products for internal use only; and 3. A high-volume manufacturing, or HVM, license which grants the rights to manufacture and sell MST-enabled products to their customers.
In addition, even if our MST technology meets our customers’ technical objectives one or more of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter into manufacturing and distribution license agreements. 8 Competition Our lead product, MST, is a proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry.
In addition, even if our MST technology meets our customers’ technical objectives one or more of our licensees may decide, for reasons unrelated to the price or performance of our MST technology, not to enter into manufacturing and distribution license agreements.
Our MST film can also create more controlled doping profiles, which allow dopants to be held in the desired locations, thereby enabling optimized device designs, lower variability and improved production yield. 4 We believe the enhancements enabled by MST, as demonstrated in simulations and on our own and our customers’ test chips, are approximately equivalent to the enhancements enabled by one-half to a full node of improvement and, therefore, can extend the productive life of capital equipment and wafer fabrication facilities.
We believe the enhancements enabled by MST, as demonstrated in simulations and on our own and our customers’ test chips, are approximately equivalent to the enhancements enabled by one-half to a full node of improvement and, therefore, can extend the productive life of capital equipment and wafer fabrication facilities.
In the fourth quarter of 2023, we completed the first major milestone under the ST license agreement by delivering our MST film recipe and ST accepting the film, resulting in our recognizing license revenue associated with that milestone. At that time, ST became our second customer to enter into Phase Four.
In the fourth quarter of 2023, we completed the first major milestone under the ST license agreement by delivering our MST film recipe and ST accepting the film, resulting in our recognizing license revenue associated with that milestone. ST is currently performing testing to optimize their integration of MST as part of their qualification process.
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.
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 design or manufacture integrated circuits directly.
We are also working with OEMs on process development and equipment optimization to ensure that MST can be reliably and predictably deposited using their manufacturing tools.
One of these Phase Four customers is ST Microelectronics (“ST”), our first customer to sign a full commercial license. We are also working with OEMs on process development and equipment optimization to ensure that MST can be reliably and predictably deposited using their manufacturing tools.
In addition, we believe that MST has the potential to deliver these benefits through a single technology that requires relatively minor modifications to the industry standard CMOS manufacturing flow. Consequently, we believe that by incorporating MST, designers can make transistors with increased speed, reliability and energy efficiency, without significantly altering the current fabrication process or cost of production.
Consequently, we believe that by incorporating MST, designers can make transistors with increased speed, reliability and energy efficiency, without significantly altering the current fabrication process or cost of production.
Because shrinking geometries at the smaller nodes incurs higher capital and manufacturing costs, only a limited number of companies can afford to continue investing in those nodes. We believe these constraints will cause semiconductor designers and manufacturers to turn to engineered materials, like MST, to solve this problem.
Because shrinking geometries at the smaller nodes incurs higher capital and manufacturing costs, only a limited number of companies can afford to continue investing in those nodes. These constraints have caused semiconductor designers and manufacturers to increasingly rely on engineered materials, like MST, to deliver node-over-node increases transistor performance without having to rely solely on dimensional (lithographic) feature scaling..
Semiconductor makers also attempted to obtain performance improvements through more exotic design architectures which frequently required material innovations to support their manufacturability and reliability. The designers and manufacturers of integrated circuits and systems — our targeted customers — are facing intense pressure to deliver innovative products while constantly reducing their time-to-market and prices.
The designers and manufacturers of integrated circuits and systems — our targeted customers — are facing intense pressure to deliver innovative products while constantly reducing their time-to-market and prices.
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.
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.
We also believe that insertion of MST can provide higher current and improved control of dopants, leading to improved device scaling. We believe MST has the potential to overcome the key challenges found in the implementation of next generation nano-scale semiconductor devices incorporating CMOS-type transistors, namely enhancing drive current, reducing gate leakage and reducing variability.
Both of these MST solutions fill a growing need for reducing power consumption and improving energy efficiency. We believe MST has the potential to overcome the key challenges found in the implementation of next generation nano-scale semiconductor devices incorporating CMOS-type transistors, namely enhancing drive current, reducing leakage and reducing variability.
We believe that MST has the potential to be one of these low-cost additive technologies, in which case MST would not be subject to significant direct competition from other technologies. We are not aware of another technology being offered in the market which provides the same technical benefits as MST.
MST has gone through this long, expensive development period and therefore we believe that it has the potential to be one of these low-cost additive technologies, in which case MST would not be subject to significant direct competition from other technologies.
We compete with IDMs, OEMs, foundries, fabless manufacturers of semiconductors and semiconductor IP licensing companies for the development and commercialization of technologies that improve the performance of semiconductors.
Atomera’s MST technology has followed a similar trajectory, from early patents, publications and presentations to the industry to early evaluations and installation at customers. We compete with IDMs, OEMs, foundries, fabless manufacturers of semiconductors and semiconductor IP licensing companies for the development and commercialization of technologies that improve the performance of semiconductors.
However, a discontinuity in the rate of improvement delivered by scaling appeared when transistor technology reached feature sizes below 100 nanometers. The industry responded with advanced materials to supplement the ongoing geometry shrinks. Some of those materials advances included strained silicon, Silicon-on-Insulator and High-K/Metal Gate.
This trend was facilitated in large part by the development of CMOS technologies and rapid improvements in in lithography, which is the technology used in patterning circuits. However, a discontinuity in the rate of improvement delivered by scaling appeared when transistor technology reached feature sizes below 100 nanometers. The industry responded with advanced materials to supplement the ongoing geometry shrinks.
We offer MST-SP and MST-SPX, which are types of MST-enabled power devices that offer what we believe to be industry-leading on-resistance (also referred to as Rsp) and reduced footprint (enabling smaller devices). We believe that the MST-SP and MST-SPX devices will have immediate application in power management integrated circuits (or PMICs) which are pervasive in hand-held, battery-powered devices and elsewhere.
We believe that the MST-SP and MST-SPX devices will have immediate application in power management integrated circuits (or PMICs) which are pervasive in hand-held, battery-powered devices and elsewhere. The higher voltage MST-SPX devices are applicable to the rapidly growing automotive and data center power sectors.
Instead, we develop and license technologies and processes that offer the designers and manufacturers of integrated circuits increased performance at a lower cost than currently available alternatives. Our customers and partners include foundries, integrated device manufacturers, or IDMs, fabless semiconductor manufacturers, OEMs that manufacture epitaxial deposition, or EPI, machines, and electronic design automation software companies, such as Synopsys.
Instead, we develop and license technologies and processes that offer the designers and manufacturers of integrated circuits increased performance at a lower cost than currently available alternatives.
This agreement provides for payment of license fees payable upon reaching milestones consistent with our standard business model. Under an integration license agreement that we entered into with ST in 2018, we granted them an integration license pursuant to which they performed extensive evaluation of our MST technology.
Customers In April 2023, we entered into a license agreement with ST that authorizes them to manufacture and distribute MST-enabled products to its customers. This agreement provides for payment of license fees payable upon reaching milestones consistent with Atomera’s standard business model.
Nevertheless, in some cases the engineering teams in our customers, who are developing their own process improvements, may view MST as competition to their internally-developed solutions. Research and Development The principal focus of our research and development efforts is on enabling existing and prospective customers to integrate MST into their manufacturing processes and enable them to commercialize MST-enabled semiconductor products.
Research and Development The principal focus of our research and development efforts is on enabling existing and prospective customers to integrate MST into their manufacturing processes and enable them to commercialize MST-enabled semiconductor products. We also dedicate research and development resources to evolving and expanding our technology to address new process technologies in the semiconductor industry roadmap.
Upon commencement of sales of wafers or devices built using MST, our customer will pay us a royalty that will be a percentage of the selling price of the wafer or device, depending on the type of customer.
Upon commencement of sales of wafers or devices built using MST, our customer will pay us a royalty that will be a percentage of the selling price of the wafer or device, depending on the terms agreed in the applicable license agreement. 6 While the above steps describe a model customer engagement, we have engaged with some customers in ways that do not follow this precise order.
These trends in both enterprise and consumer applications are driving increasing demand for integrated circuits and systems with greater functionality and performance, reduced size, and much less power consumption as key requirements. The COVID-19 pandemic accelerated trends toward remote work, cloud computing and mobile devices.
These trends in both enterprise and consumer applications are driving increasing demand for integrated circuits and systems with greater functionality and performance, reduced size, and much less power consumption as key requirements. These developments depend, in large part, on integrated circuits, or microchips, which are sets of electronic circuits on a single chip of semiconductor material, normally silicon.
These trends coincided with the rollout of 5G cellular networks and associated devices, augmented and virtual reality technologies, cryptocurrencies, and especially artificial intelligence technology, all of which require high levels of processing power. These developments depend, in large part, on integrated circuits, or microchips, which are sets of electronic circuits on a single chip of semiconductor material, normally silicon.
The COVID-19 pandemic accelerated trends toward remote and hybrid work, cloud computing and mobile devices. These trends coincided with the increasing rollout of 5G cellular networks and associated devices, augmented and virtual reality technologies, cryptocurrencies, and especially artificial intelligence technology, all of which require high levels of processing power.
In April 2022, we entered into a JDA with a major semiconductor foundry which contains technical targets which, if achieved, should result in paid licenses and engineering services revenue. Although this JDA does not confer commercial distribution rights, we believe that achievement of the JDA’s technical objectives would be a significant step toward commercialization.
We also executed a JDA with a major semiconductor foundry which contains technical targets which, if achieved, should result in paid licenses and engineering services revenue.
Historically, development of a new material technology for the semiconductor industry has taken 10-20 years from conceptualization to volume production. Atomera’s MST technology has followed a similar trajectory, from early patents, publications and presentations to the industry to early evaluations and installation at customers.
Competition Our lead product, MST, is a proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. Historically, the development of a new material technology for the semiconductor industry has taken 10-20 years from conceptualization to volume production.
A distribution license which grants the rights to manufacture and sell MST-enabled products to their customers. 1 Depending on our customers’ business needs and how we initially engaged with them, we may make these license grants in one or more separate contracts. The upfront license fee becomes larger at each stage.
Previously, our R&D license was referred to as a “manufacturing license” and our HVM license was called a “distribution license.” However, the rights conferred to customers under each of these licenses did not change and the terms are used interchangeably in this Annual Report. 1 Depending upon our customers’ business needs and how we initially engaged with them, we may make these license grants in one or more separate contracts.
The development of our technology and many of our processes are dependent upon the knowledge, experience, and skills of key scientific and technical personnel. 9 As of December 31, 2023, we have been granted 103 patents in the U.S. and 113 abroad and we have 35 pending patent applications in the U.S. and 71 abroad.
As of December 31, 2024, we have been granted 108 patents in the U.S. and 112 abroad and we have 50 pending patent applications in the U.S. and 77 abroad.
Upon the grant of a distribution license our licensees would also be required to make royalty payments to us based on the number and sales price of MST-enabled products they sell to their customers. Starting in 2019, we began to develop deeper relationships with several potential large-scale customers who were evaluating MST across multiple manufacturing processes and product lines.
The upfront license fee becomes larger at each stage. Upon the grant of an HVM license, our licensees are also required to make royalty payments to us based on the number and/or sales price of MST-enabled products they sell to their customers either at the wafer or individual chip level.
We expect that ST will now proceed to completing process qualification with MST which would result in additional license fees for the distribution license upon completion of qualification, at which time ST would commence paying royalties on MST-enabled products they sell.
Upon qualification, we will earn additional license fees for the distribution license (which we now refer to as the HVM license), after which ST will be entitled to commercially manufacture and sell MST-enabled products and royalties will be payable to us for every product sold.
We believe that MST compares favorably to other alternatives for enhancing performance of CMOS-type transistors as follows: · Strained Silicon and Silicon-on-Insulator, or SOI : Unlike strained silicon or SOI, we believe that MST delivers multiple benefits in a single film in a cost-effective manner, including enhanced transistor drive current, reduced leakage, and reduced variability.
The extent of MST-enabled enhancement depends on the device technology and application. We believe that MST compares favorably to other alternatives for enhancing performance of CMOS-type transistors and is both compatible with technologies such as strained silicon and HKMG.
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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.
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In 2024, we changed the terminology of our licenses.
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As illustrated by the accompanying diagram, MST is a “silicon-on-silicon” solution that provides multiple potential benefits through a relatively simple modification to the standard CMOS manufacturing flow. MST improvements are delivered through our proprietary and patent-protected approach that is based on the quantum mechanics of modern deep sub-micron devices.
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During 2024, we began applying our technology to wafers used for fabrication of “compound semiconductors” which are devices built using materials other than silicon, such as gallium nitride (GaN), which have properties especially attractive to the power and radio frequency markets.
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The MST film allows carriers (electrons and holes) to flow more freely in the plane of the transistor, thereby enhancing drive current, while reducing carrier flow or “leakage” in the transverse direction.
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Currently, materials such as GaN suffer from a tradeoff between high-cost specialized wafers and defective, low-yielding wafers resulting from the crystal mismatch between heterogeneous materials. We believe MST can offer a cost-effective solution to these tradeoffs by serving as a buffer layer between different materials, such as GaN and a silicon wafer substrate.
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The extent of MST-enabled enhancement depends on the device technology and application.
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Some of those materials advances included strained silicon, Silicon-on-Insulator and High-K/Metal Gate. Semiconductor makers also attempted to obtain performance improvements through more exotic design architectures which frequently required material innovations to support their manufacturability and reliability.
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Also, strained silicon tends to lose much of its effectiveness below 45nm, constraining its scalability, while our results to date indicate that the MST thin-film approach is scalable to the leading-edge nodes used for three-dimensional transistor devices using FinFET and “gate-all-around” structures.
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We offer MST-SP (between 3-5 volts) and MST-SPX (up to 48V), which are types of MST-enabled power devices that offer what we believe to be industry-leading on-resistance (also referred to as Rsp) at comparable or improved breakdown voltage and reliability metrics, enabling reduced footprint (and thus smaller devices).
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Based on our own research and development and third-party evaluations, we believe that MST can deliver improved cost-benefit performance, in most cases in an additive manner, compared to already successful strain technologies, such as dual stress liners and SiGe.
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Shown in the diagram below are two illustrative implementations of MST in advanced CMOS transistors. The first incorporates MST into the channel region of the transistor which can help to reduce gate leakage (translates to lower off-state power consumption) while the second shows MST incorporated into the source/drain region of the transistor.
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Work with our foundry partners and fabless licensee shows potential for additive improvements on specialized SOI wafers used to manufacture radio frequency, or RF, devices, which are also referred to as RFSOI wafers. · High-K/Metal Gate, or HKMG : Unlike HKMG, MST is silicon-based.
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This latter implementation helps control dopant diffusion into the channel which improves control of how the transistor turns on and the variability of the transistor operation. In addition, we believe that MST has the potential to deliver these benefits through a single technology that requires relatively minor modifications to industry-standard CMOS manufacturing flows.
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As a “silicon-on-silicon” solution, MST does not require new materials or equipment, which in our opinion makes it much easier and less costly to adopt than HKMG for devices not requiring ultrathin gate dielectrics.
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These improvements are increasingly difficult to achieve and important in next generation logic and memory devices. 4 MST improvements are delivered through our proprietary and patent-protected approach based on a deep understanding of the physics of modern semiconductor devices.
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For devices with HKMG, lab tests and simulations indicate that MST benefits transistor performance and variability in a similar manner to the benefits observed in non-HKMG devices. Testing conducted with our university research partners indicates that MST has the potential to provide additive performance benefits in devices using HKMG.
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Our MST film can be used to create better controlled doping profiles for a wide variety of semiconductor device designs, including junctions, contacts and channel regions. MST can thus enable more optimized device designs with improved current and voltage handling, lower variability and improved yield.
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Because of its physical characteristics in the channel region of the transistor, we believe MST has the further benefit of being complementary and additive to the performance-enhancing technologies noted above, making MST broadly applicable across multiple devices and process flows to meet a wide variety of customer design objectives.
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Depending on our customer’s business model and the negotiated terms of our license agreements with each customer, those royalties may be calculated on the basis of wafers or products manufactured and sold that incorporate MST.
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Subject to process and subsequent product qualifications that demonstrate, in commercial scale production, the enhancements we believe our MST technology offers, including increased speed, reliability and energy efficiency, we expect that one or more of these companies will obtain licenses from us to take our MST technology to commercial production.
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As of the date of this Annual Report, we are actively engaged with this second JDA customer and planning additional development and integration work that, if successful we believe would be a significant step toward commercialization. 7 We have also entered into integration license agreements with (i) a leading fabless RF semiconductor provider, (ii) a semiconductor foundry and (iii) Asahi Kasei Microdevices, or AKM, which is an IDM and fabless vendor.
Removed
In certain foreign jurisdictions, we engage sales representatives to assist us in establishing relationships with local customers. 7 Customers In April 2023, we entered into a full commercial license agreement with STMicroelectronics, or ST, that authorizes ST to manufacture and distribute MST-enabled products to its customers.
Added
AKM, our fabless licensee and our foundry licensee are in our Phase Three (MST Integration).
Removed
After process qualification is completed, ST will have the right to commercially distribute MST-enabled products and, assuming ST brings such products to market, we will receive royalties on all MST-enabled products manufactured for commercial purposes.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Owning Our Common Stock 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.
Biggest changeWe 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. 16 Risks Related to Owning Our Common Stock 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 shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: · actual or anticipated variations in our results of operations and financial condition; · market acceptance of our MST technology; · success or failure of our research and development projects; · announcements of technological innovations by us; · failure by us to achieve a publicly announced milestone; · failure by us to meet expectations of investors, some of which may not be within our control or be related to our public announcements; · delays between our expenditures to develop and market new or enhanced technological innovations and the generation of licensing revenue from those innovations; 18 · developments concerning intellectual property rights, including our involvement in litigation brought by or against us; · changes in the amounts that we spend to develop, acquire or license new technologies or businesses; · our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future; · changes in our key personnel; · changes in earnings estimates or recommendations by securities analysts, if we continue to be covered by analysts; · the trading volume of our shares; and · general economic and financial market conditions and other factors, including factors unrelated to our operating performance.
The market price of our shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: · actual or anticipated variations in our results of operations and financial condition; · market acceptance of our MST technology; · success or failure of our research and development projects; · announcements of technological innovations by us; · failure by us to achieve a publicly announced milestone; · failure by us to meet expectations of investors, some of which may not be within our control or be related to our public announcements; · delays between our expenditures to develop and market new or enhanced technological innovations and the generation of licensing revenue from those innovations; · developments concerning intellectual property rights, including our involvement in litigation brought by or against us; · changes in the amounts that we spend to develop, acquire or license new technologies or businesses; · our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future; · changes in our key personnel; · changes in earnings estimates or recommendations by securities analysts, if we continue to be covered by analysts; · the trading volume of our shares; and · general economic and financial market conditions and other factors, including factors unrelated to our operating performance.
Such litigation may also harm our relationships with existing licensees, who may, because of such litigation, cease making royalty or other payments to us or challenge the validity and enforceability of our patents or the scope of our license agreements. 17 In addition, the costs associated with legal proceedings are typically high, relatively unpredictable and not completely within our control.
Such litigation may also harm our relationships with existing licensees, who may, because of such litigation, cease making royalty or other payments to us or challenge the validity and enforceability of our patents or the scope of our license agreements. In addition, the costs associated with legal proceedings are typically high, relatively unpredictable and not completely within our control.
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. 12 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.
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. 11 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.
In such case, the trading price of our common stock could decline and investors could lose all or part of their investment. 10 Risks Related to Our Business We have generated limited revenue to date, so it is difficult for potential investors to evaluate our business.
In such case, the trading price of our common stock could decline and investors could lose all or part of their investment. Risks Related to Our Business We have generated limited revenue to date, so it is difficult for potential investors to evaluate our business.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our technology could be delayed. 14 We could 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 employees, customers and vendors.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our technology could be delayed. 13 We could 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 employees, customers and vendors.
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. 15 Our business operations could suffer in the event of information technology systems’ failures or security breaches .
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. 14 Our business operations could suffer in the event of information technology systems’ failures or security breaches .
We face risks inherent in a royalty-based business model, many of which are outside of our control, such as the following: · the rate of adoption and incorporation of our technology by semiconductor designers and manufacturers and the manufacturers of semiconductor fabrication equipment; · customers’ willingness to agree to an ongoing royalty model, which may impact their wafer or chip costs and margins; · our licensee customers’ ability to successfully market MST-enabled products to their end customers; · the length of the design cycle and the ability to successfully integrate our MST technology into integrated circuits; · the demand for products incorporating semiconductors that use our licensed technology; · the cyclicality of supply and demand for products using our licensed technology; · the impact of economic downturns; and · the timing of receipt of royalty reports and the applicable revenue recognition criteria, which may result in fluctuation in our results of operations. 13 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.
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 product costs and margins; · our licensee customers’ ability to successfully market MST-enabled products to their end customers; · the length of the design cycle and the ability to successfully integrate our MST technology into integrated circuits; · the demand for products incorporating semiconductors that use our licensed technology; · the cyclicality of supply and demand for products using our licensed technology; · the impact of economic downturns; and · the timing of receipt of royalty reports and the applicable revenue recognition criteria, which may result in fluctuation in our results of operations. 12 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.
As an early-stage company, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business, including, without limitation: · the timing and success of our plan of commercialization and the fact that we have entered into only one full commercial license with a customer, ST; · our ability to replicate on a large commercial scale the benefits of our MST technology that we have demonstrated in preliminary testing; · our ability to execute joint development agreements with potential customers; · our ability to structure, negotiate and enforce license agreements that will allow us to operate profitably; · our ability to advance 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 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 protect our intellectual property rights; and · our ability to raise additional capital as and when needed.
As an early-stage company, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business, including, without limitation: · the timing and success of our plan of commercialization and the fact that we have entered into only one full commercial license with a customer, ST; · our ability to replicate on a large commercial scale the benefits of our MST technology that we have demonstrated in preliminary testing; · our ability to execute joint development agreements with potential customers; · our ability to structure, negotiate and enforce license agreements that will allow us to operate profitably; · our ability to advance 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 protect our intellectual property rights; and · our ability to raise additional capital as and when needed.
There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. 11 We have a history of significant operating losses and anticipate continued operating losses for at least the near term.
There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. 10 We have a history of significant operating losses and anticipate continued operating losses for at least the near term.
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 will have a meaningful impact on any of our ongoing client engagements.
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.
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.
The long-term success of our business is dependent on future royalties paid to us by licensee-customers, whose business require them to market products to their end customers.
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. 16 Risks Related to Intellectual Property If we fail to protect and enforce our intellectual property rights and our confidential information, our business will suffer.
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 technology. 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 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 volumes of royalty-bearing products and pay upfront license fees to support our cash requirements.
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.
Manufacturing and distribution 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.
R&D 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. 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.
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. Nevertheless, neither of our JDAs commits the customers to take MST to production.
We are 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. We have utilized TSI’s services for a portion of our internal R&D which required complete semiconductor device fabrication.
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. We have utilized TSI’s services for a portion of our internal R&D which required complete semiconductor device fabrication.
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.
ST has successfully installed our MST film recipe and 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 order to validate the benefits of MST, our customer engagement process involves fabrication of wafers that incorporate MST deposited by us using our epitaxial deposition tools and then completing the manufacturing of the wafers in our customers’ facilities using their tools.
In order to validate the benefits of MST, our customer engagement process involves fabrication of wafers that incorporate MST deposited by us using our epitaxial deposition tools and then completing the manufacturing of the wafers in our customers’ facilities using their tools. The semiconductor industry in 2024 exceeded $550 billion in sales.
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.
Although these supply/demand imbalances and 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.
Our business 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.
Our business could be adversely affected by conditions in the U.S. 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 conditions.
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.
As 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.
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. As of December 31, 2023, we had an accumulated deficit of approximately $203.1 million.
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 million.
If we fail to obtain patents in a timely manner or if the patents issued to us do not cover all of the inventions disclosed in our patent applications, others could use portions of our technology and intellectual property without the payment of license fees and royalties.
If we fail to obtain patents in a timely manner or if the patents issued to us do not cover all of the inventions disclosed in our patent applications, others could use portions of our technology and intellectual property without the payment of license fees and royalties. 15 We also rely on trade secret laws rather than patent laws to protect other portions of our proprietary technology.
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. Therefore, you should not expect to receive cash dividends on our common stock.
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. Therefore, you should not expect to receive cash dividends on our common stock. 17 Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable .
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.
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. We are in active discussions with potential replacement providers of foundry services.
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.
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 agreements.
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.
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 .
If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation. We may not be successful in defending such litigation and may not be able to procure any required royalty or license agreements on acceptable terms or at all.
If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation.
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.
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.
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 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.
Removed
We protect our proprietary technology and processes, in part, through confidentiality agreements with our employees, consultants, suppliers and customers.
Added
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.
Removed
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 .
Removed
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.
Removed
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.
Removed
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.
Removed
Our management and other personnel devote a substantial amount of time to these compliance initiatives. 19 Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable .

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, we also request Systems and Organization Control (“SOC”) type reports from several of our service providers including our payroll and human resources system provider and stock administration provider.
Biggest changeIn addition, we also request Systems and Organization Control (“SOC”) type reports from several of our service providers including our payroll and human resources system provider and stock administration provider. In addition, we provide awareness training to our employees to help identify, avoid and mitigate cybersecurity threats and to remind them of the importance of handling and protecting our information.
Added
The Audit Committee of our Board of Directors created a cybersecurity subcommittee in February 2023 which evaluates our cybersecurity assessment and management policies, including quarterly interviews with our senior officers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEffective May 1, 2023, we leased an additional 404 square feet at this location under an amendment to the current lease. Our current monthly lease payment is now $2,365 and will increase to $2,435 in March 2024. The lease ends in February 2026.
Biggest changeEffective May 1, 2023, we leased an additional 404 square feet at this location under an amendment to the current lease. Our current monthly lease payment is now $2,435 and will increase to $2,509 in March 2025. The lease ends in February 2026.
Item 2. Properties Our executive offices are presently located in a 4,101 square foot facility in Los Gatos, California pursuant to a five-year lease, expiring on January 31, 2026. As part of the amended lease entered into in August 2020, our current lease payment is $17,701.
Item 2. Properties Our executive offices are presently located in a 4,101 square foot facility in Los Gatos, California pursuant to a five-year lease, expiring on January 31, 2026. As part of the amended lease entered into in August 2020, our current lease payment is $18,232.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth certain information as of December 31, 2023 about our stock plans under which our equity securities are authorized for issuance (in thousands, except exercise price). 22 Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options (a) Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) Equity compensation plans approved by security holders 3,369,641 $ 7.04 1,946,395 Equity compensation plans not approved by security holders – – – Total 3,369,641 $ 7.04 1,946,395
Biggest changePlan Category Number of Securities to be Issued Upon Exercise of Outstanding Options (a) Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) Equity compensation plans approved by security holders 3,792,615 $ 6.64 1,189,591 Equity compensation plans not approved by security holders – – – Total 3,792,615 $ 6.64 1,189,591 20
Item 5. 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 6, 2024, there were 138 holders of record of our common stock.
Item 5. 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 28, 2025, there were 120 holders of record of our common stock.
As of December 31, 2023, awards of 3,725,269 shares of common stock had been granted under the 2017 Plan, net of forfeited restricted stock and option awards and a total of 24,731 shares of common stock are reserved for issuance. In May 2023, we established our 2023 Stock Incentive Plan, or 2023 Plan.
As of December 31, 2024, awards of 3,706,063 shares of common stock had been granted under the 2017 Plan, net of forfeited restricted stock and option awards and a total of 43,937 shares of common stock are reserved for issuance. In May 2023, we established our 2023 Stock Incentive Plan, or 2023 Plan.
As of December 31, 2023, awards of 78,336 shares of common stock had been granted under the 2023 Plan, net of forfeited restricted stock and option awards and a total of 1,921,664 shares of common stock are reserved for issuance.
As of December 31, 2024, awards of 854,346 shares of common stock had been granted under the 2023 Plan, net of forfeited restricted stock and option awards and a total of 1,145,654 shares of common stock are reserved for issuance.
As of December 31, 2023, options to purchase 3,369,641 shares of common stock were outstanding under the 2007 Plan, the 2017 Plan and the 2023 Plan.
As of December 31, 2024, options to purchase 3,792,615 shares of common stock were outstanding under the 2007 Plan, the 2017 Plan and the 2023 Plan. The following table sets forth certain information as of December 31, 2024 about our stock plans under which our equity securities are authorized for issuance (in thousands, except exercise price).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

35 edited+6 added−4 removed29 unchanged
Biggest changeOur 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 manufacturing 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 silicon wafers; and · 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.
Biggest changeOur 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 manufacturing 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 silicon wafers; and · 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. 21 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.
Lease expenses for financing leases is amortization of the ROU assets over the life of the lease and interest expense is recognized on the liability. Stock-based Compensation We have stock-based compensation programs, which include restricted stock awards (“RSAs”) and stock options and an employee stock purchase plan.
Lease expenses for financing leases consists of amortization of the ROU assets over the life of the lease and interest expense is recognized on the liability. Stock-based Compensation We have stock-based compensation programs, which include restricted stock awards (“RSAs”) and stock options and an employee stock purchase plan.
Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $530+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.
Overview We are engaged in the business of developing, commercializing and licensing proprietary processes and technologies for the $550+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology™, or MST ® , is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick.
To date, our operations have focused on the research, development, patent prosecution, and commercialization of our MST technology and related technologies such as MSTcad. Our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology.
To date, our operations have focused on the research, development, and commercialization of our MST technology and related technologies such as MSTcad. Our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication (including epi tool leases) and metrology of semiconductor wafers incorporating our MST technology.
During the year ended December 31, 2023, we sold approximately 1.8 million shares pursuant to our ATM at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses.
During the year ended December 31, 2023, we sold approximately 1.8 million shares at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses.
Right-of-use (“ROU”) assets represent its right to use an underlying asset for the lease term while lease liabilities represent its obligation to make lease payments arising from the lease.
Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease.
Our license agreement with ST, which we executed in April 2023, was our first full commercial license agreement and provided for grants of a manufacturing license enabling ST to install MST in a tool in their fab and to manufacture wafers for internal development use only as well as a distribution license granted upon completion of process qualification.
Our license agreement with ST, which we executed in April 2023, was our first full commercial license agreement and provided for grants of a license enabling ST to install MST in a tool in their fab and to manufacture wafers for internal development use only as well as an HVM license granted upon completion of process qualification.
Cost of revenue was approximately $28,000 and $81,000 for the years ended December 31, 2023 and 2022, respectively. We anticipate that our cost of revenue will vary substantially depending on the mix of license and engineering services revenues we receive and the nature of products and/or services delivered in each customer engagement. Operating Expenses.
Cost of revenue was approximately $123,000 and $28,000 for the years ended December 31, 2024 and 2023, respectively. We anticipate that our cost of revenue will vary substantially depending on the mix of license and engineering services revenues we receive and the nature of products and/or services delivered in each customer engagement. Operating Expenses.
Our first JDA included the grant of a manufacturing license to our customer and we were paid for such license upon delivery of our IP transfer package which enabled our customer to install MST in a tool in their facility and to use it to manufacture wafers for internal use.
Our first JDA included the grant of an R&D license to our customer and we were paid for such license upon delivery of our IP transfer package which enabled our customer to install MST in a tool in their facility and to use it to manufacture wafers for internal use.
Interest income for each period related to interest earned on our cash and cash equivalents and the increase was primarily due to progressively higher interest rates during these periods. Accretion income. Accretion income for the year ended December 31, 2023 was approximately $283,000.
Interest income for each period related to interest earned on our cash and cash equivalents and the increase was primarily due to progressively higher interest rates and cash balances during these periods. Accretion income. Accretion income for the years ended December 31, 2024 and 2023 was approximately $178,000 and $283,000, respectively.
The fair value for our stock option awards is determined at the grant date using the Black-Scholes Option Pricing Model and amortized over the vesting period of the option. 27 Assumptions for the Black-Scholes valuation model used for employee stock awards include: · Expected term – We derived the expected term for employee stock awards using historical information to develop expectations about future exercise patterns and behavior after employment termination. · Expected volatility – Volatility is estimated using Atomera’s historical volatility for similar terms. · Expected dividend rate – We have not declared or paid dividends to our stockholders and have no plans to pay dividends; therefore, we have assumed an expected dividend yield of 0%. · Risk-free interest rate – The risk-free interest rate is based on the yields of U.S.
Assumptions for the Black-Scholes valuation model used for employee stock awards include: · Expected term – We derived the expected term for employee stock awards using historical information to develop expectations about future exercise patterns and behavior after employment termination. · Expected volatility – Volatility is estimated using Atomera’s historical volatility for similar terms. · Expected dividend rate – We have not declared or paid dividends to our stockholders and have no plans to pay dividends; therefore, we have assumed an expected dividend yield of 0%. · Risk-free interest rate – The risk-free interest rate is based on the yields of U.S.
Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the years ended December 31, 2023 and 2022 our operating expenses totaled approximately $21.2 million and $17.8 million, respectively. Research and development expenses.
Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the years ended December 31, 2024 and 2023, our operating expenses totaled approximately $19.3 million and $21.2 million, respectively. Research and development expenses.
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, 2023 and 2022 were approximately $7.1 million and $6.4 million, respectively, representing an increase of approximately $634,000, or 10%.
General and administrative expenses. 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, 2024 and 2023 were approximately $7.3 million and $7.1 million, respectively, representing an increase of approximately $191,000, or 3%.
Critical Accounting Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with those accounting principles requires us to use judgement in making estimates and assumptions based on the relevant information available at the end of each period.
The preparation of financial statements in conformity with those accounting principles requires us to use judgement in making estimates and assumptions based on the relevant information available at the end of each period.
Net cash provided by financing activities of approximately $12.7 million for the year ended December 31, 2023 related primarily to net proceeds from our ATM Facility during the year ended December 31, 2023, offset in part by approximately $918,000 in principal payments on our financing lease.
Net cash provided by financing activities of approximately $20.3 million for the year ended December 31, 2024 related primarily to net proceeds from our ATM Facility, offset in part by approximately $1.1 million in principal payments on our financing lease.
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, 2023 and 2022 were approximately $1.6 million and $1.3 million, respectively, representing an increase of approximately $251,000, or 19%.
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, 2024 and 2023 were approximately $1.1 million and $1.6 million, respectively, representing a decrease of approximately $546,000, or 34%.
Net cash used in operating activities of approximately $12.5 million for year ended December 31, 2022 resulted primarily from our net loss of approximately $17.4 million, adjusted by approximately $3.4 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.4 million.
Net cash used in operating activities of approximately $14.6 million for year ended December 31, 2023 resulted primarily from our net loss of approximately $19.8 million, adjusted by approximately $4.0 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.4 million.
For the year ended December 31, 2023, we had a net loss of approximately $19.8 million and used approximately $14.6 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.
For the year ended December 31, 2024, we had a net loss of approximately $18.4 million and used approximately $13.2 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses.
However, in cases where our manufacturing license grants include a customer acceptance requirement, revenue is recognized over time. Revenue for the years ended December 31, 2023 and 2022 was approximately $550,000 and $382,000, respectively. Our revenue for 2023 consisted of revenue from a manufacturing license.
However, in cases where our manufacturing license grants include a customer acceptance requirement, revenue is recognized over time. 22 Revenue for the years ended December 31, 2024 and 2023 was approximately $135,000 and $550,000, respectively. Our revenue in 2024 consisted of MSTcad licensing and related consulting services revenue, and engineering services revenue from the delivery of MST wafers.
Other income/expense, net. Other income for the year December 31, 2023 of approximately $75,000, consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services. There was no other income/expenses for the year ended December 31, 2022. Interest expense.
Other income consisted primarily of a refundable state research and development tax credit, net of filing costs and tax consulting services for both years. Interest expense. Interest expense for the years ended December 31, 2024 and 2023 was approximately $129,000 and $194,000, respectively.
Our revenue for 2022 consisted of a success fee pursuant to our JDA, a license fee paid under an integration license agreement and MSTcad license revenue. Cost of Revenue. Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration engineering services, support for customer installation and qualification and MSTcad support.
Our revenue for 2023 consisted of revenue from a manufacturing license. Cost of Revenue. Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide integration engineering services, support for customer installation and qualification and MSTcad support.
During the year ended December 31, 2023, approximately 1.8 million shares were sold at an average price per share of approximately $7.97, resulting in approximately $13.5 million of net proceeds to us after deducting commissions and other offering expenses. Results of Operations for the Years Ended December 31, 2023 and 2022 Revenues. To date, we have only generated limited revenue.
During the year ended December 31, 2024, we sold approximately 4.1 million shares at an average price per share of approximately $5.38, resulting in approximately $21.3 million of net proceeds to us after deducting commissions and other offering expenses. Results of Operations for the Years Ended December 31, 2024 and 2023 Revenues.
Interest expense for the years ended December 31, 2023 and 2022 was approximately $194,000 and $255,000, respectively. Interest expense is related to the tool financing lease entered into in August 2021. Liquidity and Capital Resources As of December 31, 2023, we had cash, cash equivalents and short-term investments of approximately $19.5 million and working capital of approximately $16.6 million.
Interest expense is related to the tool financing lease entered into in August 2021. 23 Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and short-term investments of approximately $26.8 million and working capital of approximately $23.5 million.
The fair value of our RSAs is measured at the market price of our common stock on the measurement date amortized over the vesting period of the award.
The fair value of our RSAs is measured at the market price of our common stock on the measurement date amortized over the vesting period of the award. The fair value for our stock option awards is determined at the grant date using the Black-Scholes Option Pricing Model and amortized over the vesting period of the option.
During the year ended December 31, 2022, approximately 527,000 shares were sold at an average price per share of approximately $11.68, resulting in approximately $5.8 million of net proceeds to us after deducting commissions and other offering expenses.
During the year ended December 31, 2024, we sold approximately 4.1 million shares pursuant to our ATM at an average price per share of approximately $5.38, resulting in approximately $21.3 million of net proceeds to us after deducting commissions and other offering expenses.
The increase in costs was primarily due to an increase in employee-related costs of approximately $166,000, an increase of approximately $116,000 in patent fees and legal fees associated with our patents, an increase of approximately $100,000 in other legal fees and an increase of approximately $301,000 in stock-based compensation expense. Selling and marketing expenses.
The increase in costs was primarily due to an increase in employee-related costs of approximately $136,000 and an increase of approximately $332,000 in patent fees and legal fees associated with our patents. These costs were partially offset by a decrease of approximately $144,000 in stock-based compensation and approximately $90,000 in corporate legal expenses. Selling and marketing expenses.
The ST license agreement provides for payments of license fees, payable upon reaching milestones for MST installation and acceptance, in the case of the manufacturing license, and upon reaching process qualification milestones. After process qualification is complete and associated payments are made, ST will be required to pay royalties for all products they sell that utilize MST.
After process qualification is complete and associated payments are made, ST will obtain an HVM license and will be required to pay royalties for all products they sell that utilize MST.
The increase in costs is primarily related to increased spending on employee-related costs of approximately $72,000, an increase in stock-based compensation of approximately $91,000 and an increase of approximately $62,000 in travel-related expenses. Interest income. Interest income for the years ended December 31, 2023 and 2022 was approximately $723,000 and $340,000, respectively.
The decrease in costs is primarily related to a reduction in headcount which decreased employee related costs, stock-based compensation and travel expenses. Interest income. Interest income for the years ended December 31, 2024 and 2023 was approximately $779,000 and $723,000, respectively.
We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits. 23 We do not intend to design or manufacture integrated circuits directly.
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 design or manufacture integrated circuits directly.
Net cash provided by financing activities of approximately $5.0 million for the year ended December 31, 2022 related primarily to net proceeds from our ATM Facility during the year ended December 31, 2022, offset in part by approximately $984,000 in principal payments on our financing lease.
Net cash provided by financing activities of approximately $12.7 million for the year ended December 31, 2023 related primarily to net proceeds from our ATM Facility, offset in part by approximately $918,000 in principal payments on our financing lease. 24 Critical Accounting Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States.
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.
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.
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. 26 Cash Flows from Operating, Investing and Financing Activities: Net cash used in operating activities of approximately $14.6 million for year ended December 31, 2023 resulted primarily from our net loss of approximately $19.8 million, adjusted by approximately $4.0 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.4 million.
Cash Flows from Operating, Investing and Financing Activities: Net cash used in operating activities of approximately $13.2 million for year ended December 31, 2024 resulted primarily from our net loss of approximately $18.4 million, adjusted by approximately $3.9 million of stock-based compensation expense and amortization of right-of-use assets of approximately $1.3 million.
For the years ended December 31, 2023 and 2022, we incurred approximately $12.5 million and $10.0 million, respectively, of research and development expense, an increase of approximately $2.5 million, or 25%. The increase was primarily due to outsourced research and development costs, which increased by approximately $1.1 million due to price increases and a higher number of wafers processed.
For the years ended December 31, 2024 and 2023, we incurred approximately $11.0 million and $12.5 million, respectively, of research and development expense, a decrease of approximately $1.5 million, or 12%. This decrease was primarily due to a decline of approximately $1.6 million in outsourced research and development as we discontinued working with TSI Semiconductor as of January 31, 2024.
Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date. There was no income from accretion for the year ended December 31, 2022 because our active cash management program, which involves investment of a portion of our cash in short-term fixed-income securities commenced in the first quarter of 2023.
Accretion income relates to the increase in value of our available-for-sale securities from the purchase date through the maturity date. Other income/expense, net. Other income for the years December 31, 2024 and 2023 was approximately $73,000 and $75,000, respectively.
Net cash used by investing activities of approximately $39,000 for the year ended December 31, 2022, consisted of the purchase of computers and lab tools for our Tempe office space.
Net cash provided in investing activities of approximately $6.1 million and for year ended December 31, 2024 consisted primarily of the maturity of short-term available-for-sale investments, offset by the purchase of short-term available-for-sale investments.
Removed
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.
Added
To date, we have only generated limited revenue from customer engagements for engineering services, integration license agreements, an R&D license granted under a JDA, our license agreement with ST and licensing of MSTcad.
Removed
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.
Added
Our license agreement with ST, which was executed in April 2023, is our first commercial manufacturing and distribution agreement and, assuming successful completion of contractual milestones and payments of associated fees, will entitle us to royalties on all MST-enabled products manufactured for commercial purposes.
Removed
In the future, we expect to collect increased fees from license agreements and JDAs as well as royalties from customer sales of products that incorporate our MST technology, subject to our ability (i) to enter into manufacturing and distribution license agreements with our current and future licensees and (ii) to advance such licensees, including ST, through licensing phases to royalty-bearing product shipments. 24 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.
Added
Our MSTcad licenses grant customers the right to use MSTcad software to simulate the effects of incorporating MST technology into their semiconductor manufacturing process. MSTcad licenses are granted on a monthly or yearly basis and revenue is recognized over time.
Removed
The other main factors that drove the increase in research and development expenses were increases of approximately $739,000 in employee costs reflecting new hires and an increase in the annual bonus accrual, an approximately $255,000 increase in stock-based compensation expense and an increase of approximately $266,000 in technical consulting expenses. 25 General and administrative expenses.
Added
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.
Added
The ST license agreement provides for payments of license fees, payable upon reaching milestones for MST installation and acceptance, in the case of the R&D license, and upon reaching process qualification milestones.
Added
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.

Other ATOM 10-K year-over-year comparisons