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...
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