Atomera (ATOM) 10-Q 1 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Oct. 26, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-37850
Entity Registrant Name	ATOMERA INCORPORATED
Entity Central Index Key	0001420520
Entity Tax Identification Number	30-0509586
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	750 University Avenue
Entity Address, Address Line Two	Suite 280
Entity Address, City or Town	Los Gatos
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95032
City Area Code	(408)
Local Phone Number	442-5248
Title of 12(b) Security	Common stock: Par value $0.001
Trading Symbol	ATOM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,799,018

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 12,642	$ 21,184
Short-term investments	7,747	0
Interest receivable	56	0
Prepaid expenses and other current assets	392	418
Total current assets	20,837	21,602
Property and equipment, net	129	158
Long-term prepaid maintenance and supplies	91	91
Security deposit	14	14
Operating lease right-of-use asset	574	700
Financing lease right-of-use-asset	3,184	4,164
Total assets	24,829	26,729
Current liabilities:
Accounts payable	462	397
Accrued expenses	230	173
Accrued payroll related expenses	698	967
Current operating lease liability	262	245
Current financing lease liability	1,299	1,126
Total current liabilities	2,951	2,908
Long-term operating lease liability	348	521
Long-term financing lease liability	2,066	2,986
Total liabilities	5,365	6,415
Commitments and contingencies (see Note 9)
Stockholders’ equity:
Preferred stock $0.001 par value, authorized 2,500 shares; none issued and outstanding as of September 30, 2023 and December 31, 2022	0	0
Common stock: $0.001 par value, authorized 47,500 shares; 25,804 shares issued and 25,784 outstanding as of September 30, 2023; and 23,973 shares issued and outstanding as of December 31, 2022	26	24
Additional paid in capital	217,946	203,585
Other comprehensive income (loss)	(3)	0
Accumulated deficit	(198,505)	(183,295)
Total stockholders’ equity	19,464	20,314
Total liabilities and stockholders’ equity	$ 24,829	$ 26,729

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	2,500	2,500
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	47,500	47,500
Common stock, shares issued	25,804	23,973
Common stock, shares outstanding	25,784	23,973

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 0	$ 2	$ 0	$ 377
Cost of revenue	0	0	0	(81)
Gross margin	0	2	0	296
Operating expenses
Research and development	3,305	2,743	9,533	7,515
General and administrative	1,683	1,567	5,200	4,882
Selling and marketing	365	347	1,147	1,019
Total operating expenses	5,353	4,657	15,880	13,416
Loss from operations	(5,353)	(4,655)	(15,880)	(13,120)
Other income (expense)
Interest income	177	113	528	151
Accretion income	112	0	221	0
Interest expense	(47)	(60)	(151)	(200)
Other income (expense), net	72	0	72	0
Total other income (expense), net	314	53	670	(49)
Net loss	$ (5,039)	$ (4,602)	$ (15,210)	$ (13,169)
Net loss per common share, basic	$ (0.20)	$ (0.20)	$ (0.62)	$ (0.57)
Net loss per common share, diluted	$ (0.20)	$ (0.20)	$ (0.62)	$ (0.57)
Weighted average number of common shares outstanding, basic	25,255	23,294	24,536	23,029
Weighted average number of common shares outstanding, diluted	25,255	23,294	24,536	23,029

Condensed Statements of Compreh

Condensed Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net loss	$ (5,039)	$ (4,602)	$ (15,210)	$ (13,169)
Unrealized gain (loss) on available-for-sale securities	(1)	0	(3)	0
Net loss	$ (5,040)	$ (4,602)	$ (15,213)	$ (13,169)

Statements of Stockholders' Equ

Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 23	$ 194,212		$ (165,854)	$ 28,381
Beginning balance, shares at Dec. 31, 2021	23,207
Stock-based compensation		726			726
Stock-based compensation, shares	161
Stock option exercises		166			166
Stock option exercises, shares	25
Net loss				(4,086)	(4,086)
Ending balance, value at Mar. 31, 2022	$ 23	195,104		(169,940)	25,187
Ending balance, shares at Mar. 31, 2022	23,393
Beginning balance, value at Dec. 31, 2021	$ 23	194,212		(165,854)	28,381
Beginning balance, shares at Dec. 31, 2021	23,207
Net loss					(13,169)
Unrealized gain (loss) on available-for-sale securities					0
Ending balance, value at Sep. 30, 2022	$ 24	201,678		(179,023)	22,679
Ending balance, shares at Sep. 30, 2022	23,854
Beginning balance, value at Mar. 31, 2022	$ 23	195,104		(169,940)	25,187
Beginning balance, shares at Mar. 31, 2022	23,393
Stock-based compensation		859			859
Stock-based compensation, shares	33
At-the-market sale of stock, net of commissions and expenses		185			185
At-the-market sale of stock, net of commissions and expenses, shares	31
Net loss				(4,481)	(4,481)
Ending balance, value at Jun. 30, 2022	$ 23	196,148		(174,421)	21,750
Ending balance, shares at Jun. 30, 2022	23,457
Stock-based compensation		889			889
Stock option exercises		39			39
Stock option exercises, shares	10
At-the-market sale of stock, net of commissions and expenses	$ 1	4,602			4,603
At-the-market sale of stock, net of commissions and expenses, shares	387
Net loss				(4,602)	(4,602)
Unrealized gain (loss) on available-for-sale securities					0
Ending balance, value at Sep. 30, 2022	$ 24	201,678		(179,023)	22,679
Ending balance, shares at Sep. 30, 2022	23,854
Beginning balance, value at Dec. 31, 2022	$ 24	203,585	$ 0	(183,295)	20,314
Beginning balance, shares at Dec. 31, 2022	23,973
Stock-based compensation		927			927
Stock-based compensation, shares	297
Stock option exercises		39			39
Stock option exercises, shares	10
At-the-market sale of stock, net of commissions and expenses		274			274
At-the-market sale of stock, net of commissions and expenses, shares	50
Net loss				(5,019)	(5,019)
Unrealized gain (loss) on available-for-sale securities			(2)		(2)
Ending balance, value at Mar. 31, 2023	$ 24	204,825	(2)	(188,314)	16,533
Ending balance, shares at Mar. 31, 2023	24,330
Beginning balance, value at Dec. 31, 2022	$ 24	203,585	0	(183,295)	20,314
Beginning balance, shares at Dec. 31, 2022	23,973
Net loss					(15,210)
Unrealized gain (loss) on available-for-sale securities					(3)
Ending balance, value at Sep. 30, 2023	$ 26	217,946	(3)	(198,505)	19,464
Ending balance, shares at Sep. 30, 2023	25,784
Beginning balance, value at Mar. 31, 2023	$ 24	204,825	(2)	(188,314)	16,533
Beginning balance, shares at Mar. 31, 2023	24,330
Stock-based compensation		1,030			1,030
Stock-based compensation, shares	60
Stock option exercises		39			39
Stock option exercises, shares	10
At-the-market sale of stock, net of commissions and expenses	$ 2	10,787			10,789
At-the-market sale of stock, net of commissions and expenses, shares	1,370
Net loss				(5,152)	(5,152)
Ending balance, value at Jun. 30, 2023	$ 26	216,681	(2)	(193,466)	23,239
Ending balance, shares at Jun. 30, 2023	25,770
Stock-based compensation		1,041			1,041
Stock option exercises		39			39
Stock option exercises, shares	10
Forfeited restricted stock awards
Forfeited restricted stock awards, shares	(20)
At-the-market sale of stock, net of commissions and expenses		185			185
At-the-market sale of stock, net of commissions and expenses, shares	24
Net loss				(5,039)	(5,039)
Unrealized gain (loss) on available-for-sale securities			(1)		(1)
Ending balance, value at Sep. 30, 2023	$ 26	$ 217,946	$ (3)	$ (198,505)	$ 19,464
Ending balance, shares at Sep. 30, 2023	25,784

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (15,210)	$ (13,169)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	60	58
Operating lease right of use asset amortization	159	149
Financing lease right of use asset amortization	865	938
Stock-based compensation	2,998	2,474
Accretion of discounts on available-for-sale securities	(198)	0
Changes in operating assets and liabilities:
Interest receivable	(13)	0
Prepaid expenses and other current assets	26	(288)
Accounts payable	65	186
Accrued expenses	57	2
Accrued payroll expenses	(269)	193
Operating lease liability	(189)	(125)
Deferred revenue	0	1
Net cash used in operating activities	(11,649)	(9,581)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment	(31)	(26)
Purchase of available-for-sale securities	(16,595)	0
Maturity of available-for-sale securities	9,000	0
Net cash used in investing activities	(7,626)	(26)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from at-the-market sale of stock, net of commissions and expenses	11,248	4,788
Proceeds from exercise of stock options	117	205
Payments on principal of financing lease	(632)	(798)
Net cash provided by financing activities	10,733	4,195
Net decrease in cash and cash equivalents	(8,542)	(5,412)
Cash and cash equivalents at beginning of period	21,184	28,699
Cash and cash equivalents at end of period	12,642	23,287
Supplemental information:
Cash paid for interest	151	200
Cash paid for taxes	$ 0	$ 0

NATURE OF OPERATIONS

NATURE OF OPERATIONS	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	1. NATURE OF OPERATIONS Atomera Incorporated (“Atomera” or the “Company”) was incorporated in the state of Delaware in March 2007 under the name MEARS Technologies, Inc. and is engaged in the development, commercialization and licensing of proprietary processes and technologies for the semiconductor industry. On January 12, 2016, the Company changed its name to Atomera Incorporated. Atomera is an early-stage company, having only recently begun limited revenue-generating activities, and is devoting substantially all its efforts toward technology research and development and to commercially licensing its technology to designers and manufacturers of integrated circuits.

LIQUIDITY AND MANAGEMENT PLANS

LIQUIDITY AND MANAGEMENT PLANS	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND MANAGEMENT PLANS	2. LIQUIDITY AND MANAGEMENT PLANS At September 30, 2023, the Company had cash, cash equivalents and short-term investments of approximately $ 20.4 17.9 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 on August 10, 2016, and subsequent public offerings of its common stock. On May 31, 2022, Atomera entered into an Equity Distribution Agreement with Oppenheimer & Co. Inc. and Craig-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”). During the nine months ended September 30, 2023, the Company sold approximately 1.4 million 8.11 11.2 million 24,000 9.17 185,000 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. If the Company is not able to generate sufficient revenue from license fees and royalties in a timeframe that satisfies its cash needs, it will need to raise more capital. In the event it requires additional capital, it will endeavor to acquire additional funds through various financing sources, including the ATM Facility, follow-on equity offerings, debt financing and joint ventures with industry partners. In addition to use of the ATM Facility and other capital raising alternatives, the Company will consider alternatives to our current business plan that may enable it to achieve revenue-producing operations and meaningful commercial success with a smaller amount of capital. If the Company is unable to secure sufficient additional capital, it may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve cash.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	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 the Securities and Exchange Commission (“SEC”) on February 15, 2023. Basis of presentation of unaudited condensed financial information The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the 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 of December 31, 2022 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2023. These unaudited condensed financial statements should be read in conjunction with that report. Cash, cash equivalents, and short-term investments The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds or U.S. agency bonds. Cash and cash equivalents are carried at cost, which approximates their fair value. The Company's portfolio of short-term investments is comprised solely of U.S. treasury bills and agency bonds with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss). Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the consolidated statements of operations. Adoption of recent accounting standards From time to time, new accounting standards are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. No new accounting standards, issued or effective during the period ended September 30, 2023, have had or are expected to have a significant impact on the Company’s financial statements.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2023
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	4. FAIR VALUE MEASUREMENTS Accounting Standards Codification (“ASC”) 820, Fair Value Measurements Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s cash equivalents and short-term investments that were measured at fair value on a recurring basis as Level 1 assets. The Company’s cash, cash equivalents and short-term investments classified by security type as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands): Schedule fair value measurements September 30, 2023 December 31, 2022 Cost Unrealized Gain/(Loss) Accretion of Discount Fair Value Cost Fair Value Cash $ – $ – $ – $ – $ 1 $ 1 Money market funds 11,649 – – 11,649 21,183 21,183 US treasury bills 4,902 (1 ) 61 4,962 – – US agency bonds 3,763 (2 ) 17 3,778 – – Total $ 20,314 $ (3 ) $ 78 $ 20,389 $ 21,184 $ 21,184

REVENUE

REVENUE	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
REVENUE	5. REVENUE The Company recognizes revenue in accordance with 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 to grant a license, revenue is recognized either at a point in time (such as a right to use access 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, 2023 2022 2023 2022 Primary geographic markets North America $ – $ 2 $ – $ 77 Asia Pacific – – – 300 Total $ – $ 2 $ – $ 377 Timing of revenue recognition Products and services transferred at a point in time $ – $ – $ – $ 375 Products and services transferred over time – 2 – 2 Total $ – $ 2 $ – $ 377 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.

BASIC AND DILUTED LOSS PER SHAR

BASIC AND DILUTED LOSS PER SHARE	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
BASIC AND DILUTED LOSS PER SHARE	6. 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. 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 Nine Months Ended September 30, 2023 2022 Stock Options 3,370 3,019 Unvested restricted stock 481 403 Total 3,851 3,422

LEASES

LEASES	9 Months Ended
	Sep. 30, 2023
Leases
LEASES	7. 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 and interest expense. The Company’s lease agreement for a tool used in the development and marketing of the Company’s technology established a monthly lease payment of $150,000 per month. The lease contains a provision for an annual adjustment of lease payments based on tool availability and usage during the preceding 12 months and the adjusted payment is calculated on August 1 of each year of the lease. Effective August 1, 2022, the lease payments for this tool were reduced to $100,824 per month for the period August 1, 2022 through July 31, 2023. This adjustment to the lease payments resulted in a reduction in the ROU and corresponding lease liability. Effective August 1, 2023, the lease payments for this tool were adjusted to $137,650 per month for the period August 1, 2023 through July 31, 2024. This adjustment to the lease payments also resulted in a reduction in the ROU and corresponding lease liability. Effective May 1, 2023, the Company leased an additional 404 square feet at its Tempe office location under an amendment to its current lease. The monthly rent payment increased from $1,277 per month to $2,365 per month and the increased rent under the amended lease is accounted for as a modification to the lease under ASC 842 at the time of commencement. At the effective date of the lease amendment, a right-of-use asset of approximately $ 33 12 21 In December 2022, the Company entered into a lease agreement for a tool in Tempe, Arizona. The term of this lease is for six months beginning on January 1, 2023 with an option to extend the lease for an additional six months. The initial lease terms were $96,000 per month. In March 2023, the Company elected to extend the lease through December 31, 2023 and in consideration for this extension the remaining lease payments were reduced to $84,000. Since the lease and extension are not for more than one year, the future lease payments are not included in the lease obligations on the Company’s condensed balance sheets. The Company terminated its office lease in Cambridge, Massachusetts as of March 31, 2023. The cost of the lease was $2,942 per month. The components of lease costs were as follows (in thousands): Schedule components of lease costs Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Financing lease costs: Amortization of ROU assets $ 284 $ 300 $ 865 $ 938 Interest on lease liabilities 47 60 151 200 Total financing lease costs $ 331 $ 360 $ 1,016 $ 1,138 Operating lease costs: Fixed lease costs $ 66 $ 62 $ 192 $ 186 Variable lease costs 1 – 1 – Short-term lease costs 251 9 792 29 Total operating lease costs $ 318 $ 71 $ 985 $ 215 Future minimum payments under non-cancellable leases as of September 30, 2023 were as follows (in thousands): Schedule of future minimum lease payments For the Year Ended December 31, Financing leases Operating leases Remaining 2023 $ 329 $ 39 2024 1,367 291 2025 1,436 298 2026 478 24 2027 & thereafter – – Total future minimum lease payments $ 3,610 $ 652 Less imputed interest (245 ) (42 ) Total lease liability $ 3,365 $ 610 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 and financing leases Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 55 $ 53 $ 216 $ 161 Cash paid for amounts included in the measurement of financing liabilities $ 300 $ 280 $ 782 $ 998 Non-cash activity: Right-of-use assets obtained in exchange for operating lease obligations $ – $ – $ 33 $ – Remeasurement of right-of-use asset and liability in financing lease $ (114 ) $ (458 ) $ (114 ) $ (458 ) The table above does not include short-term leases that are one-year or less. The weighted average remaining discount rate is 5.48 5.25 2.4 2.8

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
STOCK BASED COMPENSATION	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 25 2,000 1.9 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, 2023 and 2022 for stock options and restricted stock granted under the Company’s incentive plans (in thousands): Schedule of stock-based compensation expense Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 Research and development $ 364 $ 305 $ 1,064 $ 844 General and administrative 588 518 1,683 1,446 Selling and Marketing 89 66 251 184 Total $ 1,041 $ 889 $ 2,998 $ 2,474 As of September 30, 2023, there was approximately $ 7.6 2.6 The weighted average grant date fair value per share of the options granted under the Company’s Plans were $ 4.68 4.94 8.48 10.37 The following table summarizes stock option activity during the nine months ended September 30, 2023 (in thousands except exercise prices and contractual terms): Schedule of stock option activity Number of Shares Weighted- Average Exercise Prices per Share Weighted- Remaining Contractual Term (In Years) Intrinsic Outstanding at January 1, 2023 3,009 $ 7.07 Granted 391 $ 6.54 Exercised (30 ) $ 3.90 Outstanding at September 30, 2023 3,370 $ 7.03 4.9 $ 2,234 Exercisable at September 30, 2023 2,788 $ 6.60 4.1 $ 2,087 During the nine months ended September 30, 2023, the Company granted options under the 2017 Plan to purchase approximately 391 2 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 ended September 30, 2023 (in thousands except per share data): Schedule of restricted stock option activity Number of Shares Weighted-Average Grant Date Fair Value per Share Outstanding at January 1, 2023 340 $ 10.78 Granted 357 $ 7.00 Forfeited (20 ) $ 8.63 Vested (196 ) $ 8.63 Outstanding non-vested shares at September 30, 2023 481 $ 8.94 During the nine months ended September 30, 2023, the Company granted approximately 357,000 2.5 million

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	9. 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 September 30, 2023, or through the date these financial statements have been issued.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	10. SUBSEQUENT EVENTS Management has evaluated subsequent events and transactions through the date these financial statements were issued. Since September 30, 2023, the Company has issued approximately 15,000 additional shares through its ATM offering at an average price per share of $7.13 resulting in additional net proceeds of approximately $104,000.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
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 the Securities and Exchange Commission (“SEC”) on February 15, 2023.
Basis of presentation of unaudited condensed financial information	Basis of presentation of unaudited condensed financial information The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the 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 of December 31, 2022 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 15, 2023. These unaudited condensed financial statements should be read in conjunction with that report.
Cash, cash equivalents, and short-term investments	Cash, cash equivalents, and short-term investments The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds or U.S. agency bonds. Cash and cash equivalents are carried at cost, which approximates their fair value. The Company's portfolio of short-term investments is comprised solely of U.S. treasury bills and agency bonds with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss). Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.
Adoption of recent accounting standards	Adoption of recent accounting standards From time to time, new accounting standards are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. No new accounting standards, issued or effective during the period ended September 30, 2023, have had or are expected to have a significant impact on the Company’s financial statements.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Sep. 30, 2023
Fair Value Disclosures [Abstract]
Schedule fair value measurements	Schedule fair value measurements September 30, 2023 December 31, 2022 Cost Unrealized Gain/(Loss) Accretion of Discount Fair Value Cost Fair Value Cash $ – $ – $ – $ – $ 1 $ 1 Money market funds 11,649 – – 11,649 21,183 21,183 US treasury bills 4,902 (1 ) 61 4,962 – – US agency bonds 3,763 (2 ) 17 3,778 – – Total $ 20,314 $ (3 ) $ 78 $ 20,389 $ 21,184 $ 21,184

REVENUE (Tables)

REVENUE (Tables)	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Schedule of disaggregated revenue and timing of revenue	Schedule of disaggregated revenue and timing of revenue Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Primary geographic markets North America $ – $ 2 $ – $ 77 Asia Pacific – – – 300 Total $ – $ 2 $ – $ 377 Timing of revenue recognition Products and services transferred at a point in time $ – $ – $ – $ 375 Products and services transferred over time – 2 – 2 Total $ – $ 2 $ – $ 377

BASIC AND DILUTED LOSS PER SH_2

BASIC AND DILUTED LOSS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Schedule of anti dilutive shares	Schedule of anti dilutive shares Nine Months Ended September 30, 2023 2022 Stock Options 3,370 3,019 Unvested restricted stock 481 403 Total 3,851 3,422

LEASES (Tables)

LEASES (Tables)	9 Months Ended
	Sep. 30, 2023
Leases
Schedule components of lease costs	Schedule components of lease costs Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Financing lease costs: Amortization of ROU assets $ 284 $ 300 $ 865 $ 938 Interest on lease liabilities 47 60 151 200 Total financing lease costs $ 331 $ 360 $ 1,016 $ 1,138 Operating lease costs: Fixed lease costs $ 66 $ 62 $ 192 $ 186 Variable lease costs 1 – 1 – Short-term lease costs 251 9 792 29 Total operating lease costs $ 318 $ 71 $ 985 $ 215
Schedule of future minimum lease payments	Schedule of future minimum lease payments For the Year Ended December 31, Financing leases Operating leases Remaining 2023 $ 329 $ 39 2024 1,367 291 2025 1,436 298 2026 478 24 2027 & thereafter – – Total future minimum lease payments $ 3,610 $ 652 Less imputed interest (245 ) (42 ) Total lease liability $ 3,365 $ 610
Supplemental non-cash activity related to operating and financing leases	Supplemental non-cash activity related to operating and financing leases Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 55 $ 53 $ 216 $ 161 Cash paid for amounts included in the measurement of financing liabilities $ 300 $ 280 $ 782 $ 998 Non-cash activity: Right-of-use assets obtained in exchange for operating lease obligations $ – $ – $ 33 $ – Remeasurement of right-of-use asset and liability in financing lease $ (114 ) $ (458 ) $ (114 ) $ (458 )

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of stock-based compensation expense	Schedule of stock-based compensation expense Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 Research and development $ 364 $ 305 $ 1,064 $ 844 General and administrative 588 518 1,683 1,446 Selling and Marketing 89 66 251 184 Total $ 1,041 $ 889 $ 2,998 $ 2,474
Schedule of stock option activity	Schedule of stock option activity Number of Shares Weighted- Average Exercise Prices per Share Weighted- Remaining Contractual Term (In Years) Intrinsic Outstanding at January 1, 2023 3,009 $ 7.07 Granted 391 $ 6.54 Exercised (30 ) $ 3.90 Outstanding at September 30, 2023 3,370 $ 7.03 4.9 $ 2,234 Exercisable at September 30, 2023 2,788 $ 6.60 4.1 $ 2,087
Schedule of restricted stock option activity	Schedule of restricted stock option activity Number of Shares Weighted-Average Grant Date Fair Value per Share Outstanding at January 1, 2023 340 $ 10.78 Granted 357 $ 7.00 Forfeited (20 ) $ 8.63 Vested (196 ) $ 8.63 Outstanding non-vested shares at September 30, 2023 481 $ 8.94

LIQUIDITY AND MANAGEMENT PLANS

LIQUIDITY AND MANAGEMENT PLANS (Details Narrative)	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares
Subsidiary, Sale of Stock [Line Items]
Cash, cash equivalents and short-term investments	$ 20,400,000	$ 20,400,000
Working capital	$ 17,900,000	$ 17,900,000
ATM Facility [Member]
Subsidiary, Sale of Stock [Line Items]
Sale of stock, shares | shares	24,000	1,400,000
Average price per share | $ / shares	$ 9.17	$ 8.11
Proceeds from sale of stock, value	$ 185,000	$ 11,200,000

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 1 [Member] - Fair Value, Recurring [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost	$ 20,314	$ 21,184
Unrealized Gain/(Loss)	(3)
Accretion of Discount	78
Fair Value	20,389	21,184
Cash [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost	0	1
Unrealized Gain/(Loss)	0
Accretion of Discount	0
Fair Value	0	1
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost	11,649	21,183
Unrealized Gain/(Loss)	0
Accretion of Discount	0
Fair Value	11,649	21,183
U S Treasury Bills [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost	4,902	0
Unrealized Gain/(Loss)	(1)
Accretion of Discount	61
Fair Value	4,962	0
U S Agency Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost	3,763	0
Unrealized Gain/(Loss)	(2)
Accretion of Discount	17
Fair Value	$ 3,778	$ 0

REVENUE (Details)

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 0	$ 2	$ 0	$ 377
Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	375
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	2	0	2
North America [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	2	0	77
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 0	$ 0	$ 0	$ 300

BASIC AND DILUTED LOSS PER SH_3

BASIC AND DILUTED LOSS PER SHARE (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive shares	3,851	3,422
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive shares	3,370	3,019
Unvested Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive shares	481	403

LEASES (Details - Lease costs)

LEASES (Details - Lease costs) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Financing lease costs:
Amortization of ROU assets	$ 284	$ 300	$ 865	$ 938
Interest on lease liabilities	47	60	151	200
Total financing lease costs	331	360	1,016	1,138
Operating lease costs:
Fixed lease costs	66	62	192	186
Variable lease costs	1	0	1	0
Short-term lease costs	251	9	792	29
Total operating lease costs	$ 318	$ 71	$ 985	$ 215

LEASES (Details - Minimum lease

LEASES (Details - Minimum lease payments) $ in Thousands	Sep. 30, 2023 USD ($)
Operating Leases [Member]
Debt Instrument [Line Items]
Remaining 2023	$ 39
2024	291
2025	298
2026	24
2027 & thereafter	0
Total future minimum lease payments	652
Less imputed interest	(42)
Total lease liability	610
Financing Leases [Member]
Debt Instrument [Line Items]
Remaining 2023	329
2024	1,367
2025	1,436
2026	478
2027 & thereafter	0
Total future minimum lease payments	3,610
Less imputed interest	(245)
Total lease liability	$ 3,365

LEASES (Details - Cash flow eff

LEASES (Details - Cash flow effect) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$ 55	$ 53	$ 216	$ 161
Cash paid for amounts included in the measurement of financing liabilities	300	280	782	998
Non-cash activity:
Right-of-use assets obtained in exchange for operating lease obligations	0	0	33	0
Remeasurement of right-of-use asset and liability in financing lease	$ (114)	$ (458)	$ (114)	$ (458)

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	May 01, 2023	Dec. 31, 2022
Right-of-use asset	$ 574		$ 700
Short-term operating lease liability	262		245
Long-term operating lease liability	$ 348		$ 521
Lessee, operating lease, terminate description	The Company terminated its office lease in Cambridge, Massachusetts as of March 31, 2023. The cost of the lease was $2,942 per month.
Operating lease, weighted average discount rate	5.48%
Financing lease, weighted average discount rate	5.25%
Operating lease, weighted average lease term	2 years 4 months 24 days
Financing lease, weighted average lease term	2 years 9 months 18 days
Tempe Office [Member]
Right-of-use asset		$ 33
Short-term operating lease liability		12
Long-term operating lease liability		$ 21

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details - Compensation Expense) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated stock-based compensation	$ 1,041	$ 889	$ 2,998	$ 2,474
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated stock-based compensation	364	305	1,064	844
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated stock-based compensation	588	518	1,683	1,446
Selling And Marketing [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated stock-based compensation	$ 89	$ 66	$ 251	$ 184

STOCK BASED COMPENSATION (Det_2

STOCK BASED COMPENSATION (Details - Stock Option Activity) - Equity Option [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding, Beginning balance	3,009
Weighted average exercise prices per share, Beginning balance	$ 7.07
Number of shares, Granted	391
Weighted average exercise prices per share, Granted	$ 6.54
Number of shares, Exercised	(30)
Weighted average exercise prices per share, Exercised	$ 3.90
Number of shares outstanding, Ending balance	3,370
Weighted average exercise prices per share, Ending balance	$ 7.03
Weighted average remaining contractual term, Outstanding	4 years 10 months 24 days
Intrinsic value outstanding, Ending balance	$ 2,234
Number of shares, Exercisable	2,788
Weighted average exercise prices per share, Exercisable	$ 6.60
Weighted average remaining contractual term, Exercisable	4 years 1 month 6 days
Intrinsic value, Exercisable	$ 2,087

STOCK BASED COMPENSATION (Det_3

STOCK BASED COMPENSATION (Details - Restricted stock) - Restricted Stock [Member] shares in Thousands	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding, Beginning balance | shares	340
Weighted average grant date fair value per share outstanding, Beginning balance | $ / shares	$ 10.78
Number of shares, Granted | shares	357
Weighted average grant date fair value per share, Granted | $ / shares	$ 7
Number of shares, Forfeited | shares	(20)
Weighted average grant date fair value per share, Forfeited | $ / shares	$ 8.63
Number of shares, Vested | shares	(196)
Weighted average grant date fair value per share, Vested | $ / shares	$ 8.63
Number of shares outstanding, Ending balance | shares	481
Weighted average grant date fair value per share outstanding, Ending balance | $ / shares	$ 8.94

STOCK BASED COMPENSATION (Det_4

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares remaining, available for issuance	1,900,000		1,900,000
Equity Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation expense	$ 7,600,000		$ 7,600,000
Unrecognized compensation weighted average period			2 years 7 months 6 days
Options granted			391,000
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Restricted stock granted			357,000
Restricted Stock [Member] | Employees And Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Fair value of options granted			$ 2,500,000
Restricted stock granted			357,000
Plan 2017 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized for issuance	3,750,000		3,750,000
Shares remaining, available for issuance	25,000		25,000
Plan 2017 [Member] | Equity Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Weighted average grant date fair value per share	$ 4.68	$ 8.48	$ 4.94	$ 10.37
Options granted			391,000
Fair value of options granted			$ 2,000,000
Plan 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized for issuance	2,000,000		2,000,000