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.

The Company records deferred revenue when revenue will be recognized after invoicing. During the three and nine months ended September 30, 2019,March 31, 2020, the Company recognized approximately $16,000 and $55,000, respectively,$37,000 of revenue that was included in deferred revenue as of December 31, 2018.2019.

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.

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):

The Company leases corporate office space in Los Gatos, California. This lease has a remaining term of 1610 months as of September 30, 2019.March 31, 2020. This lease is accounted for under ASC Topic 842 and as a result, the most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Upon adoption the Company recorded an operating lease right-of-use asset and the related lease liability.liability at January 1, 2019. The lease liability is based on the present value of the remaining minimum lease payments, discounted using the Company’s estimated incremental borrowing rate of 10% at the effective date of January 1, 2019. As permitted under ASC Topic 842, the Company elected several practical expedients that permit it to not reassess (1) whether a contract is or contains a. The lease (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs.

The impact of the adoption of ASC Topic 842 on the balance sheet at January 1, 2019 was (in thousands):

The current lease accounted for under ASC Topic 842 contains escalating payments on the anniversary of the commencement. These additional lease components are included in the measurement of the initial lease liability. Additional payments based on a change in the Company’s share of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term.

The components of operating lease costs were as follows (in thousands):

Future minimum payments under non-cancellable leases as of September 30, 2019March 31, 2020 were as follows (in thousands):

The below table provides supplemental information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

_________________________

In October 2016,2019, the Company entered into an agreement to lease agreementa tool for approximately 200 square feetuse in the development of office space in Cambridge, Massachusetts.the Company’s technology. The lease with monthly payments of $2,074is for five years at $150,000 per month, commenced on October 24, 2016.month. The lease rate increasedcommencement date is anticipated to $2,619 on January 1, 2019 andbe in June 2020, at which time the Company will increase to $2,942 on January 1, 2020. Becauseaccount for the lease is month to month and can be cancelled with a 30-day notice, the future lease payments are not includedunder ASC 842. A prepayment of rent of $450,000 was made in the Company’sthree months ended March 31, 2020, this payment represents that final three payments under the lease accounting underand is recorded as a long-term prepaid until the lease commencement, at which time it will be record in accordance with ASC Topic 842.

A summary of warrant activity for the three months ended March 31, 2020 is as follows (in thousands except per share amounts and contractual term):

The warrants outstanding at March 31, 2020 had an intrinsic value of $0 based on a per-share stock price of $3.50 as of March 31, 2020.

On March 17, 2020, 196,602 warrants with an exercise price of $3.75 were set to expire. Prior to the expiration, the Company entered into an agreement with the warrant holders, whereby it modified the terms of the warrants to extend the expiration date until September 17, 2020 in exchange for the removal of a cashless exercise provision. No other terms were modified. Due to this modification, the Company incurred a modification expense of approximately $139,000 that is included in general and administration expense on the Condensed Statement of Operations.

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 vest over a one to four-year period from the date of grant under the 2017 Plan.

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,March 31, 2020 and 2019 and 2018 for stock options and restricted stock granted under the 2017 Plan and the 2007 Plan (in thousands):

As September 30, 2019,March 31, 2020, there was approximately $4.6$6.9 million of total unrecognized compensation expense related to unvested share-based compensation arrangements that are expected to vest. This cost is expected to be recognized over a weighted-average period of 2.53.0 years.

The weighted average grant date fair value per share of the options granted under the Company’s 2017 Plan was $2.50$2.70 and $3.63$2.50 for the ninethree months ended September 30,March 31, 2020 and 2019, and 2018, respectively.

The following table summarizes stock option activity during the ninethree months ended September 30, 2019March 31, 2020 (in thousands except exercise prices and contractual terms):

During the ninethree months ended September 30, 2019March 31, 2020, the Company granted options under the 2017 Plan to purchase approximately 458,000646,000 shares of its common stock to its employees. The fair value of these options was approximately $1.1$1.7 million at the time of grant.

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 ninethree months ended September 30, 2019March 31, 2020 (in thousands except per share data):

During the ninethree months ended September 30, 2019March 31, 2020, the Company granted approximately 365,000420,000 restricted stock awards under the 2017 Plan to its employees and directors. The fair value of these awards was approximately $1.4$1.7 million at the time of grant.

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 September 30, 2019,March 31, 2020, or through the date these financial statements have been issued.

Management has evaluated subsequent events and transactions through the date these financial statements were issued.

On October 9, 2019, the Company entered into an agreement to lease a tool for use in the development of the Company’s technology. The lease is for five years at $150,000 per month. The lease commencement date is anticipated to be March 1, 2020.

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 of Atomera Incorporated should be read in conjunction with our unaudited condensed financial statements and the accompanying notes that appear elsewhere in this filing. 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 Prospectus Supplement with the SEC on May 30, 2019 and referenced under the heading “Risk Factors” within Part II,I, Item 1A of this Quarterlyour Annual Report on Form 10-K filed with the SEC on March 13, 2020 and other documents we subsequently file from time to time with the SEC, such as our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. 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 $450+ billion semiconductor industry. Our lead technology, named Mears Silicon Technology^TM, or MST^®, is a thin film of reengineered silicon, typically 100 to 300 angstroms (or approximately 20 to 60 silicon atomic unit cells) thick. MST can be applied as a transistor channel enhancement to CMOS-type transistors, the most widely used transistor type in the semiconductor industry. MST is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry. We believe that by incorporating MST, transistors can be made smaller, with increased speed, reliability and energy 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 intend to develop and license technologies and processes that we believe will 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 are expected to include:

We intend to generate revenue through licensing arrangements whereby foundries and IDMs 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 intend to enter into licensing arrangements with fabless semiconductor manufacturers pursuant to which we will charge them a royalty for each device they sell that incorporates our MST technology.

We were organized as a Delaware limited liability company under the name Nanovis LLC on November 26, 2001. On March 13, 2007, we converted to a Delaware corporation under the name Mears Technologies, Inc. On January 12, 2016, we changed our name to Atomera Incorporated.

On August 10, 2016, we closed our initial public offering of 3,680,000 shares of common stock at a public offering price of $7.50 per share. We received approximately $24.7 million in net proceeds after deducting underwriting discounts and commission and other offering expenses.

On October 15, 2018, we closed an underwritten public offering of 2,625,000 shares of common stock at a public offering price of $4.75 per share, resulting in approximately $11.4 million of net proceeds to us after deducting underwriting discounts and commission and other offering expenses.

On May 30, 2019, we closed a registered direct offering of 1,675,000 shares of common stock at a price of $4.00 per share, resulting in approximately $6.4 million of net proceeds to us after deducting placement agent fees and other offering expenses.

Results of Operations

In December 2019, a novel strain of coronavirus, known as COVID-19, was reported to have surfaced in Wuhan, China. In January 2020, this coronavirus spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified. Commencing in March 2020, much of the United States and certain other countries have been the subject of lock-downs and self-isolation procedures, which have significantly limited business operations and restricted internal and external meetings. As of the date of this report, we continue to progress on our customer engagements and internal research and development, with some minor slowdowns due to the COVID-19 pandemic. However, as of the date of this report, none of our customer engagements have stopped entirely. The outbreak and any future preventative or protective actions that we or our customers may take in respect of this coronavirus may result in a period of disruption to work in progress. Our customers’ businesses could be disrupted, and our ongoing and future technology evaluations, contract negotiations and revenues could be negatively affected. Any resulting financial impact cannot be reasonably estimated at this time but may materially affect our business and financial condition. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus, future government-mandated restrictions, and our customers’ and partners’ responses to such new information and restrictions, among others.

Revenues. To date, we have only generated limited revenue from customer engagements for integration engineering services and integration license agreements. In the future, we expect to collect increased fees from license agreements as well asand royalties from customer sales of products that incorporate our MST technology, subject to our ability to enter into manufacturing and distribution license agreements with our current and future licensees. Our integration services consist of depositing our MST film on semiconductor wafers, delivering such wafers to customers to finalize building devices, and performing tests for customers evaluating MST. The integration license agreements we have entered into to date grant the licensees the right to build products that integrate our MST technology deposited by us onto their semiconductor wafers, but the agreements do not grant the licensees the rights to manufacture on their site or to sell products incorporating MST. RevenueFor 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 upon transferas the services are provided to the customer. In general, this is proportionate to the delivery of control of promised products, services or intellectual property (IP) rights in an amount that reflectsMST processed wafers to the consideration that we expect to receive in exchange for those products, services or licensing of IP rights. The integration licensecustomer, but if the agreements that we currently have in place do not specify the numbera time and quantity of wafers to be delivered by us, sowafer delivery, we recognizewill record revenue over the period duringof time of which we estimate that we will deliver wafers under each contract.anticipate delivering an estimated quantity of wafers.

Revenue for the three months ended September 30,March 31, 2020 and 2019 and 2018 was approximately $254,000$62,000 and $0,$71,000, respectively. Revenue for the nine months ended September 30, 2019 and 2018 was approximately $395,000 and $96,000, respectively. Our revenue during thesein both periods was generated from integration license agreements and integration services agreements.

Cost of Revenue.Cost of revenue from integration service agreements consists of costs of materials, as well as direct compensation and expenses incurred to provide suchintegration engineering services. Cost of revenue fromwas approximately $13,000 and $0 for three months ended March 31, 2020 and 2019, respectively. We anticipate that our cost of revenue will vary substantially depending on the mix of integration license agreements consistsand integration engineering services and the nature of third-party royalties, if any, incurred to grant such licenses. Cost of revenue for the three and nine months ended September 30, 2019 approximately $204,000 and $224,000, respectively. Cost of revenue for the three and nine months ended September 30, 2018 was approximately $0 and $113,000, respectively.products and/or services delivered in each customer engagement.

Operating ExpensesExpenses.. Operating expenses consist of research and development, general and administrative, and selling and marketing expenses. For the three months ended September 30,March 31, 2020 and 2019 and 2018 our operating expenses totaled approximately $3.2$3.7 million and $3.5$3.7 million, respectively. The decrease in operating expenses was due to a decrease of approximately $176,000 in research and development expense and a decrease of approximately $85,000 in general and administrative expense. For the nine months ended September 30, 2019 and 2018 our operating expenses totaled approximately $10.7 million and $9.8 million, respectively. The increase in operating expenses was due to an increase of approximately $580,000 in research and development expense and an increase of approximately $267,000 in general and administrative expense.

Research and development expense.To date, our operations have focused on the research, development, patent protection, and commercialization of our processes and technologies includingrelated to our proprietary and patent-protected MST performance enhancement technology. Our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication and metrology of semiconductor wafers incorporating our MST technology.

For the three months ended September 30,March 31, 2020 and 2019, and 2018, we incurred approximately $1.7$2.1 million and $1.9$2.1 million, respectively, of research and development expense, a decrease of approximately $176,000$65,000 or 9%3%. The decrease in research and development expense is primarily due to a decrease in outsourced research and development of approximately $220,000 in spending on outsourced fabrication and metrology and a decrease of approximately $40,000 in payroll expense reflecting a decrease in accrued bonuses. The decreases are partly$180,000 offset by an approximately $74,000 increase in stock-based compensation expense.

For the nine months ended September 30, 2019payroll related expenses and 2018, we incurred approximately $5.9 million and $5.4 million, respectively, of research and development expense, an increase of approximately $580,000 or 11%. The increase in research and development expense is primarily due to an increase of approximately $267,000 in spending on outsourced fabrication and metrology to support increased engagements with customers evaluating MST, an increase of approximately $104,000 in payroll expense reflecting an increase in engineering headcount and accrued bonuses and an increase in stock-based compensation expense of approximately $213,000.$113,000 as we continue to increase our headcount in this area.

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 for the three months ended September 30,March 31, 2020 and 2019 and 2018 were approximately $1.2$1.4 million and $1.3 million, respectively, representing a decrease of approximately $85,000 or 6%. The decrease in costs was primarily due to a decrease of approximately $110,000 in legal expenses and a decrease in bonus accrual of approximately $69,000, offset in part by an increase of approximately $93,000 in stock-based compensation as compared to the three months ended September 30, 2018.

General and administrative costs for the nine months ended September 30, 2019 and 2018 were approximately $4.0 million and $3.8 million, respectively, representing an increase of approximately $267,000$124,000 or 7%9%. The increase inis costs was primarily due to an increase of approximately $266,000$120,000 in professional fees related to legal and patent fees and the expense resulting from the modification of expiring warrants of approximately $139,000 (see note 7 in our condensed financial statements included elsewhere in this report). These increases were offset by a decrease in stock-based compensation expense compared to the nine months ended September 30, 2018.of approximately $113,000.

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 ended September 30,March 31, 2020 and 2019 and 2018 were approximately $240,000$225,000 and $237,000, respectively.

Selling and marketing expenses for the nine months ended September 30, 2019 and 2018 were approximately $712,000 and $695,000,$247,000, respectively, representing an increasea decrease of approximately $17,000,$22,000, or 2%9%.

Interest income.Interest income for the three months ended September 30,March 31, 2020 and 2019 and 2018 was approximately $89,000$38,000 and $48,000, respectively. Interest income for the nine months ended September 30, 2019 and 2018 was approximately $265,000 and $145,000,$90,000, respectively. Interest income for each period related to interest earned on our cash and cash equivalents.

Cash Flows from Operating, Investing and Financing Activities

Net cash used in operating activities of approximately $3.6 million for the three months ended March 31, 2020 resulted primarily from our net loss of approximately $3.6 million.

Net cash used in operating activities of approximately $3.8 million for the three months ended March 31, 2019 resulted primarily from our net loss of approximately $3.5 million adjusted by approximately $694,000 for stock-based compensation expense and a decrease in liabilities of approximately $847,000.

Net cash used in investing activities of approximately $3,000 for the three months ended March 31, 2020 and approximately $42,000 for the three months ended March 31, 2019 consisted of the purchase of computers and lab tools.

Net cash provided by financing activities of approximately $164,000 for the three months ended March 31, 2020 was related to the exercise of approximately 189,000 warrants at an exercise price of $3.75. We did not have any cashflows from financing activities for the three months ended March 31, 2019.

Liquidity and Capital Resources

On May 30, 2019, we closed a registered direct offering of 1,675,000 shares of common stock at a price of $4.00 per share, resulting in approximately $6.4 million of net proceeds to us after deducting commission and other offering expenses.

As of September 30, 2019,March 31, 2020, we had cash and cash equivalents of approximately $16.8$11.4 million and working capital of approximately $15.9$10.4 million. For the ninethree months ended September 30, 2019,March 31, 2020, we had a net loss of approximately $10.3$3.6 million and used approximately $8.5$3.6 million of cash and cash equivalents in operations. Since inception, we have incurred recurring operating losses. At September 30, 2019, we had an accumulated deficit of approximately $132.2 million.

As of the date of this report, 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. If we are unable to generate meaningful revenue from manufacturing license fees and royalty-based distribution agreements or otherwise, we may need to raise additional capital. However, the semiconductor industry is generally slow to adopt new manufacturing process technologies and conducts long testing and qualification processes which we have limited ability to control, and there can be no assurance of the timing of our receipt of meaningful amounts of revenue. In addition, the ongoing COVID-19 pandemic has impacted some customer contract negotiations and the economic uncertainty caused by the pandemic may negatively impact our ability to generate revenue.

Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability, in the near term, 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 engineering services, license fees and royalties in a timeframe that satisfies our cash needs, we will need to raise more capital. In the event we require additional capital, we will endeavor to acquire additional funds through various financing sources, including follow-on equity offerings, debt financing and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable to us to achieve revenue-producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees thatIf we are unable to secure additional capital, will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unablerequired to further pursuecurtail our business planresearch and we may be unabledevelopment initiatives and take additional measures to continue operations.

Cash Flows from Operating, Investing and Financing Activities

Net cash usedreduce costs in operating activities of approximately $8.5 million for the nine months ended September 30, 2019 resulted primarily from our net loss of approximately $10.3 million adjusted by approximately $2.3 million for stock-based compensation expense and a decrease in liabilities of approximately $514,000.

Net cash used in operating activities of approximately $7.4 million for the nine months ended September 30, 2018 resulted primarily from out net loss of approximately $9.7 million adjusted by approximately $1.8 million for stock-based compensation expense.

Net cash used in investing activities of approximately $51,000 for the nine months ended September 30, 2019 and approximately $21,000 for nine months ended September 30, 2018 consisted of the purchase of computers and lab tools.

Net cash provided by financing activities of approximately $6.4 million for the nine months ended September 30, 2019 relatedorder to the net proceeds from our registered direct offering of common stock in May 2019. Net cash used in financial activities of approximately $35,000 for the nine months ended September 30, 2018 related to the October 2018 underwritten public offering.conserve cash.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements or issued guarantees to third parties.

Recent Accounting Standards

We are required to adopt certain new accounting standards, including Accounting Standards Update (“ASU”) No 2016-02,Leases (Topic 842). Seesee note 3 to the condensed financial statements included in Item 1 of this Form 10-Q.

Critical Accounting Policies

There have been no changes to our critical accounting policies from those included in our Annual Report on Form 10-K for the year ended December 31, 20182019 filed with the SEC on March 11, 2019 except for the adoption of ASC Topic 842 as noted above under the caption “Recent Accounting Standards.”13, 2020.

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and principal financial and accounting officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on this evaluation, management concluded that our disclosure controls and procedures were effective as of September 30, 2019.March 31, 2020.

Changes in Internal Control over Financial Reporting

There have not been any changes to our internal controls over financial reporting (as defined by Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the three-month period ended September 30, 2019March 31, 2020 that have material affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. Other Information

Item 1A. Risk Factors

The primary risk factors affecting our business have not changed materially from the risk factors set forth in our Prospectus Supplement10-K for the year ended December 31, 2019 filed with the SEC on May 30, 2019.March 13, 2020

Item 6. Exhibits

The following is a list of exhibits filesfiled as part of this Report on Form 10-Q:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and the on the date indicated.