ATOMERA INCORPORATED AtSeptember 30, 2022 , the Company had cash and cash equivalents of approximately$23.3 million and working capital of approximately$21.1 million . The Company has generated only limited revenues since inception and has incurred recurring operating losses. Accordingly, it is subject to all the risks inherent in the initial organization, financing, expenditures, and scaling of a new business that is not generating positive cashflow. The Company has primarily financed operations through private placements of equity and debt securities, the Company's Initial Public Offering (the "IPO") which was consummated onAugust 10, 2016 , and subsequent public offerings of its common stock. OnMay 31, 2022 ,Atomera entered into an Equity Distribution Agreement withOppenheimer & Co. Inc. andCraig-Hallum Capital Group LLC , as agents, under which the Company may offer and sell, from time to time at its sole discretion, shares of its$0.001 par value common stock, in "at the market" offerings to or through the agent as its sales agent, having an aggregate offering price of up to$50.0 million (the "ATM Facility"). Based on the funds it has available as of the date of the filing of this report, the Company believes that it has sufficient capital to fund its current business plans and obligations over, at least, 12 months from the date that these financial statements have been issued. The Company's future capital requirements and the adequacy of its available funds will depend on many factors, including the Company's ability to successfully commercialize its technology, competing technological and market developments, and the need to enter into collaborations with other companies or acquire technologies to enhance or complement its current offerings. The Company's operating plans for the next 12 months include increased research and development expenses. For capital needs beyond the next 12 months, the Company currently expects to rely on its ATM, but the terms on which any future stock sales will occur will depend on both market conditions and the Company's business performance, so there can be no guarantee that funds will be available on commercially reasonable terms.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies
There have been no material changes in the Company's significant accounting policies to those previously disclosed in the Company's Annual Report on Form 10-K filed with theSecurities and Exchange Commission ("SEC") on February
15, 2022.
Basis of presentation of unaudited condensed financial information
The unaudited condensed financial statements of the Company for the three and nine months endedSeptember 30, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted inthe United States of America ("GAAP") for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company's financial position and its results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as ofDecember 31, 2021 , was derived from the audited financial statements included in the Company's financial statements as of and for the year endedDecember 31, 2021 , included in the Company's Annual Report on Form 10-K filed with theSEC onFebruary 15, 2022 . These unaudited condensed financial statements should be read in conjunction with that report. 7
Adoption of recent accounting standards
InAugust 2020 , theFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity's own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted earnings per share computation The Company adopted this standard onJanuary 1, 2022 and it did not have a material impact on its financial position, results of operations or financial statement disclosure. 4. REVENUE The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") No. 606. The Company generates revenues from engineering service contracts, license agreements and joint development agreements. The amount of revenue that the Company recognizes reflects the consideration it expects to receive in exchange for goods or services and such revenue is recognized when the Company satisfies a performance obligation by transferring the product or service to the customer. When the Company's performance obligation is the promise to grant a license, revenue is recognized either at a point in time (such as a right to uselicensed technology that is under the customer's control). Or over time (typically a right to access technology without obtaining control).
The following table provides information about disaggregated revenue by primary geographical markets and timing of revenue recognition (in thousands):
Schedule of disaggregated revenue
and timing of revenue
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Primary geographic markets
North America $ 2 $ - $ 77 $ -
Asia Pacific - - 300 400
Total $ 2 $ - $ 377 $ 400
Timing of revenue recognition
Products and services transferred
at a point in time $ - $ - $ 375 $ 400
Products and services transferred
over time 2 - 2 -
Total $ 2 $ - $ 377 $ 400
Unbilled contracts receivable and deferred revenue
Timing of revenue recognition may differ from the timing of invoicing customers. Accounts receivable includes amounts billed and currently due from customers. Unbilled contracts receivable represents unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and the right to receive payment is subject to the underlying contractual terms. Unbilled contracts receivable amounts may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date.
5. BASIC AND DILUTED LOSS PER SHARE
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding and the dilutive common stock equivalent shares outstanding during the period. The Company's potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants and (ii) vesting of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share when their effect is dilutive. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Accordingly, basic and diluted net loss per share are equal. 8
The following potential common stock equivalents were not included in the calculation of diluted net loss per common share because the inclusion thereof would be anti-dilutive (in thousands):
Schedule of anti dilutive shares
Three and Nine Months Ended
September 30,
2022 2021
Stock Options 3,019 2,975
Unvested restricted stock 403 452
Warrants - 1
Total 3,422 3,428
6. LEASES
The Company accounts for leases over one year under ASC 842. Lease expense for the Company's operating leases consists of the lease payments recognized on a straight-line basis over the lease term. Expenses for the Company's financing leases consists of the amortization expenses recognized on a straight-line basis over the lease term, variable lease costs and interest expense. The Company's lease agreement for a tool used in the development and marketing of the Company's technology contains a provision for an annual adjustment of lease payments based on tool availability and usage. The potential lease payment adjustment is determined onAugust 1 of each year of the lease and is calculated based on the tool availability and usage for the preceding 12 months. EffectiveAugust 1, 2022 , the lease payments for this tool were reduced to$100 ,824per month for the periodAugust 1, 2022 throughJuly 31, 2023 . This adjustment to the variable lease payments resulted in a reduction in ROU and corresponding lease liability. The components of lease costs were as follows (in thousands): Components of lease costs Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Financing lease costs: Amortization of ROU assets$ 300 $ 211 $ 938 $ 211
Interest on lease liabilities 60 52 200
52
Total financing lease costs $ 360 $ 263 $ 1,138 $ 263
Operating lease costs:
Fixed lease costs $ 62 $ 63 $ 186 $ 177
Short-term lease costs 9 10 29 32
Total operating lease costs $ 71 $ 73 $ 215 $ 209 Future minimum payments under non-cancellable leases as of
Schedule of future minimum lease payments For the Year Ended December 31, Financing leases Operating leases Remaining 2022 $ 240 $ 86 2023 1,161 271 2024 1,436 278 2025 1,436 284 2026 & thereafter 479 21
Total future minimum lease payments $ 4,752 $
940
Less imputed interest (455 ) (81 )
Total lease liability $ 4,297 $ 859
9
The table above reflects minimum payments used to calculate our liability under
our leases but do not reflect future variable lease payment such as the modified
monthly payment under the terms of the financing lease for our tool, as
discussed above.
The below table provides supplemental information and non-cash activity related to the Company's operating and financing leases are as follows (in thousands):
Supplemental non-cash activity
related to operating leases
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Operating cash flow information:
Cash paid for amounts included in the
measurement of operating lease
liabilities $ 53 $ 52 $ 161 $ 90
Cash paid for amounts included in the
measurement of financing liabilities $ 280 $ - $ 998 $ -
Non-cash activity:
Right-of-use assets obtained in
exchange for operating lease
obligations $ - $ - $ - $ 382
Right-of-use assets obtained in
exchange for financing lease
obligations $ - $ 6,383 $ - $ 6,383
Remeasurement of right-of-use asset
and liability in financing lease
obligations $ (458 ) $ - $ (458 ) $ -
The weighted average remaining discount rate is 5.25% for the Company's operating and financing leases. The weighted average remaining lease term is 3.4 years for operating leases and 3.8 years for the financing lease.
InOctober 2016 , the Company entered into a lease agreement for approximately 200 square feet of office space inCambridge, Massachusetts . The lease, with current monthly payments of$2,942 per month, commenced onOctober 24, 2016 . Because the lease is month to month and can be cancelled with a 30-day notice, the future lease payments are not included in the Company's lease accounting under ASC Topic 842. 7. WARRANTS
A summary of warrant activity for nine months ended
Schedule of warrant activity
Weighted
Weighted Average
Average Remaining
Exercise Contractual
Number of Prices per Term (In Intrinsic
Shares Share Years) Value
Outstanding at January 1, 2022 1 $ 33.75
Forfeited (1 ) $ 33.75
Outstanding and exercisable at
September 30, 2022 - $ - - -
10
8. STOCK BASED COMPENSATION
In May 2017 , the Company's shareholders approved its 2017 Stock Incentive Plan
("2017 Plan") after its 2007 Stock Incentive Plan ("2007 Plan") had expired in
March 2017 . The 2017 Plan provides for the grant of non-qualified stock options
and incentive stock options to purchase shares of the Company's common stock and
for the grant of restricted and unrestricted shares. The 2017 Plan provides for
the issuance of 3,750,000 shares of common stock. All of the Company's employees
and any subsidiary employees (including officers and directors who are also
employees), as well as all of the Company's nonemployee directors and other
consultants, advisors and other persons who provide services to the Company are
eligible to receive incentive awards under the 2017 Plan. Generally, stock
options and restricted stock issued under the 2017 Plan vest over a period of
one to four years from the date of grant.
The following table summarizes the stock-based compensation expense recorded in
the Company's results of operations during the three and nine months ended
September 30, 2022 and 2021 for stock options and restricted stock granted under
the 2017 Plan and 2007 Plan (in thousands):
Schedule of stock-based compensation
expense
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Research and development $ 305 $ 267 $ 844 $ 757
General and administrative 518 442 1,446 1,451
Selling and Marketing 66 47 184 126
Total $ 889 $ 756 $ 2,474 $ 2,334
As of September 30, 2022 , there was approximately $7.2 million of total
unrecognized compensation expense related to unvested share-based compensation
arrangements. This cost is expected to be recognized over a weighted-average
period of 2.1 years.
The weighted average grant date fair value per share of the options granted under the Company's 2017 Plan was$8.48 and$10.37 for the three and nine months endedSeptember 30, 2022 , respectively. The weighted average grant date fair value per share of the options granted under Company's 2017 Plan was$13.77 and$15.29 for the three and nine months endedSeptember 30, 2021 , respectively.
The following table summarizes stock option activity during the nine months
ended
Schedule of stock option activity
Weighted- Weighted-
Average Average
Exercise Remaining
Number of Prices per Contractual Intrinsic
Shares Share Term (In Years) Value
Outstanding at January 1, 2022 2,869 $ 6.64
Granted 196 $ 14.21
Exercised (35 ) $ 5.80
Forfeited (3 ) $ 28.66
Expired (8 ) $ 33.09
Outstanding at September 30, 2022 3,019 $ 7.05 5.32 $ 11,393
Exercisable at September 30, 2022 2,519 $ 6.41 4.75$ 9,894 During the nine months endedSeptember 30, 2022 , the Company granted options under the 2017 Plan to purchase approximately 196,000 shares of its common stock to its employees. The fair value of these options was approximately$2.0 million at the time of grant. 11
The Company issues restricted stock to employees, directors and consultants and estimates the fair value based on the closing price on the day of grant. The following table summarizes all restricted stock activity during the nine months endedSeptember 30, 2022 (in thousands except per share data):
Schedule of restricted stock option activity
Weighted-Average
Number of Grant Date Fair Value
Shares per ShareOutstanding at January 1, 2022 386 $
6.75
Granted 194 $ 14.41
Vested (177 ) $ 7.47Outstanding non-vested shares at September 30, 2022 403 $
10.11
During the nine months ended
9. PROVISION FOR INCOME TAXES The Company recorded a provision for income taxes of approximately$17,000 and$48,000 during the three and nine months endedSeptember 30, 2021 , respectively. The provision is for withholding of income taxes accrued in foreign jurisdictions where we have income. The Company recorded the provision in accordance with ASC 740 using its estimated annual tax rate and applied it to the net loss for the three and nine months endedSeptember 30, 2021 . The Company did not incur withholding of income taxes for the three or nine months endedSeptember 30, 2022 .
10. COMMITMENTS AND CONTINGENCIES
Litigation, Claims and Assessments
The Company may be subject to periodic lawsuits, investigations and claims that
arise in the ordinary course of business. The Company is not party to any
material litigation as of
11. SUBSEQUENT EVENTS
Management has evaluated subsequent events and transactions through the date these financial statements were issued.
12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations ofAtomera Incorporated should be read in conjunction with our financial statements and the accompanying notes that appear elsewhere in this Quarterly Report. Statements in this Quarterly Report on Form 10-Q include forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements. Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks, uncertainties, and changes in condition, significance, value and effect, including those risk factors set forth in our Annual Report on Form 10-K for the year endedDecember 31, 2021 filed with theSEC onFebruary 15, 2022 . Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results to differ materially from those expressed herein and in ways not readily foreseeable. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report and are based on information currently and reasonably known to us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. 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. MST can be applied as a transistor channel enhancement to CMOS-type transistors, the most widely used transistor type in the semiconductor industry. MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability and power efficiency. In addition, since MST is an additive and low-cost technology, we believe it can be deployed on an industrial scale, with machines commonly used in semiconductor manufacturing. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits. We do not intend to design or manufacture integrated circuits directly. Instead, we develop and license technologies and processes that we believe offer the designers and manufacturers of integrated circuits a low-cost solution to the industry's need for greater performance and lower power consumption. Our customers and partners include:
· foundries, which manufacture integrated circuits on behalf of fabless
manufacturers;
· integrated device manufacturers, or IDMs, which are the fully-integrated
designers and manufacturers of integrated circuits;
· fabless semiconductor manufacturers, which are designers of integrated
circuits that outsource the 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.
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. We also license our MSTcadTM software to our
customers for use in simulating the effects of using MST technology on their
wafers and/or devices. To date, we have generated revenue from (i) licensing
agreements with two IDMs, one fabless manufacturer and one foundry, (ii) a joint
development agreement, or JDA, with a leading semiconductor provider, (iii)
engineering services provided to foundries, IDMs and fabless companies and(iv) licensing MSTcad. 13
We were organized as a
OnMay 31, 2022 , we entered into an Equity Distribution Agreement withOppenheimer & Co. Inc andCraig-Hallum Capital Group LLC , as agents, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to$50.0 million in an "at-the-market" or ATM offering, to or through the agents. During the three months endedSeptember 30, 2022 , approximately 386,000 shares were sold at an average price per share of approximately$12.34 , resulting in approximately$4.6 million of net proceeds to us after deducting commissions and other offering expenses. Results of Operations Revenues. To date, we have only generated limited revenue from customer engagements for integration engineering services, integration license agreements, a manufacturing license granted under a JDA and licensing of MSTcad. 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 to enter into manufacturing and distribution license agreements with our current and future licensees. Our integration services consist of depositing our MST film on semiconductor wafers, delivering such wafers to customers to finalize building devices, and performing tests for customers evaluating MST. The integration license agreements we have entered into grant the licensees the right to build products that integrate our MST technology deposited by us onto their semiconductor wafers, but the agreements do not grant the licensees the rights to manufacture MST-enabled wafers in their facilities or to sell products incorporating MST. Our 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. This JDA also contained targeted technical specifications that, if met, would result in payment of a success fee to us. Those technical objectives were met and we have collected the success fee. For revenue recognition purposes, we have determined that the grant of rights in integration licenses is not distinct from the delivery of integration services, and therefore revenue from both integration licenses and integration services is recognized as the services are provided to the customer. In general, this is proportionate to the delivery of MST processed wafers to the customer, but if the agreements do not specify a time and quantity of wafer delivery, we will record revenue over the period of time of which we anticipate delivering an estimated quantity of wafers. We have also determined that the grant of our manufacturing license under the JDA confers a right to use our technology and accordingly revenue was recognized at the point in time when we delivered our IP transfer package. The success fee under our JDA was treated as engineering services revenue and recognized upon our customer's confirmation that the JDA's technical objectives had been met. Our licensing of MSTcad grants customers the right to use MSTcad software to simulate the effects of incorporating MST technology into their semiconductor manufacturing process. Such MSTcad licenses are granted on a monthly basis and revenue is recognized over time. Revenue for the three months endedSeptember 30, 2022 and 2021 was$2,000 and$0 , respectively. Revenue for the three months endedSeptember 30, 2022 consisted of MSTcad licensing. Revenue for the nine months endedSeptember 30, 2022 and 2021 was$377,000 and$400,000 , respectively. Our revenue for the nine months endedSeptember 30, 2022 consisted of a success fee pursuant to our JDA, a license fee paid under an integration license agreement and MSTcad license revenue. Our revenue for the nine months endedSeptember 30, 2021 consisted of a manufacturing license fee pursuant to our JDA. Cost of revenue. Cost of revenue consists of costs of materials, as well as direct compensation and expenses incurred to provide support for our success fee and wafers delivered as part of the integration license agreement. Cost of revenue was not recorded for the three months endedSeptember 30, 2022 or 2021. Cost of revenue was approximately$81,000 and$0 for the nine months endedSeptember 30, 2022 and 2021, 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.Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the three months endedSeptember 30, 2022 and 2021, our operating expenses totaled approximately$4.7 million and$4.1 million , respectively. For the nine months endedSeptember 30, 2022 and 2021, our operating expenses totaled approximately$13.4 million and$11.9 million respectively. 14 Research and development expense. 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. For the three months endedSeptember 30, 2022 and 2021, we incurred approximately$2.7 million and$2.2 million , respectively, of research and development expense, an increase of approximately$511,000 , or 23%. The increase was primarily due to approximately$315,000 of outsourced research and development, approximately$110,000 in recruiting fees for newly-hired employees and approximately$64,000 in consulting fees. For the nine months endedSeptember 30, 2022 and 2021, we incurred approximately$7.5 million and$6.5 million , respectively, of research and development expense, an increase of approximately$985,000 , or 15%. The increase was primarily due to approximately$908,000 of tool lease related expenses as the tool lease commenced inAugust 2021 , an increase of approximately$70,000 in recruiting costs for newly-hired employees and an increase in stock-based compensation of approximately$86,000 The increases in these costs was partly offset by a reduction in payroll-related expense of approximately$183,000 . General and administrative expense. General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees. General and administrative costs were approximately$1.6 million in both the three months endedSeptember 30, 2022 and 2021, representing a decrease of approximately$70,000 , or 4%. The decrease is primarily related to reduced patent-related costs offset by higher payroll-related costs and stock-based compensation. General and administrative costs for the nine months endedSeptember 30, 2022 and 2021 were approximately$4.9 million and$4.7 million , respectively, representing an increase of approximately$226,000 , or 5%. The increase in costs was primarily due to increases of approximately$107,000 in employee-related costs and$95,000 in insurance expenses. Selling and marketing expense.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 three months endedSeptember 30, 2022 and 2021 were approximately$347,000 and$267,000 , respectively, representing an increase of approximately$80,000 , or 30%. The increase in costs is primarily related to increased costs related to payroll, travel and stock-based compensation. Selling and marketing expenses for the nine months endedSeptember 30, 2022 and 2021 were approximately$1.0 million and$670,000 , respectively, representing an increase of approximately$349,000 , or 52%. The increase in costs is primarily related to increased spending in employee-related costs of approximately$117,000 , an increase in outsourced marketing expenses of approximately$88,000 and an increase in stock-based compensation of approximately$58,000 . Interest income. Interest income for three months endedSeptember 30, 2022 and 2021 was approximately$113,000 and$2,000 , respectively. Interest income for the nine months endedSeptember 30, 2022 and 2021 was approximately$151,000 and$7,000 , respectively. Interest income for each period related to interest earned on our cash and cash equivalents. Interest expense. Interest expense for the three and nine months endedSeptember 30, 2022 was approximately$60,000 and$200,000 , respectively. Interest expense was approximately$52,000 for each of the three and nine months endedSeptember 30, 2021 . Interest expense is related to the tool financing lease entered into inAugust 2021 .
Provision for income taxes. The provision for income tax for the three and nine months endedSeptember 30, 2021 was approximately$17,000 and$48,000 , respectively, and related to income taxes due to a foreign country arising from withholding taxes imposed on payments received for revenue. There was no provision for income tax recorded for the three or nine months endedSeptember 30, 2022 . 15
Cash Flows from Operating, Investing and Financing Activities
Net cash used in operating activities of approximately$9.6 million for the nine months endedSeptember 30, 2022 resulted primarily from our net loss of approximately$13.2 million offset by approximately$2.5 million stock-based compensation and approximately$1.1 million in amortization of right-of-use assets. Net cash used in operating activities of approximately$9.4 million for the nine months endedSeptember 30, 2021 resulted primarily from our net loss of approximately$11.5 million and an increase of approximately$297,000 in prepaid expenses and other assets, offset by approximately$2.3 million of stock-based compensation.
Net cash used in investing activities of approximately$26,000 for the nine months endedSeptember 30, 2022 and approximately$102,000 for the nine months endedSeptember 30, 2021 consisted of the purchase of computers, lab tools and leasehold improvements for the remodeledLos Gatos office space and lab tools to use with the epi tool leased inTempe, Arizona . Net cash provided by financing activities of approximately$4.2 million for the nine months endedSeptember 30, 2022 primarily related to the net proceeds from our ATM offering, offset by the principal payments on our financing lease. Net cash provided by financing activities of approximately$3.4 million for the nine months endedSeptember 30, 2021 related to the exercise of approximately 506,000 stock options and net proceeds from our at-the-market offering which began inSeptember 2020 and concluded inJanuary 2021 .
Liquidity and Capital Resources
As of
During the three months ended
We believe that our available working capital is sufficient to fund our presently forecasted working capital requirements for, at least, the next 12 months following the date of the filing of this report. However, our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our MST technology, competing technological and market developments, and the need to enter into collaborations with other companies or acquire technologies to enhance or complement our current offerings. If we are not able to generate sufficient revenue from license fees and royalties in a timeframe that satisfies our cash needs, we will need to raise more capital. In the event we require additional capital, we will endeavor to acquire additional funds through various financing sources, including our ATM Facility, follow-on equity offerings, debt financing and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable to us to achieve revenue-producing operations and meaningful commercial success with a smaller amount of capital. 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.
Critical Accounting Estimates
There have been no changes to our critical accounting estimates from those
included in our Annual Report on Form 10-K for the year ended
16
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