Atomera Inc (ATOM) Q3 2022 Earnings Name Transcript

November 10, 2022

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Atomera Inc (ATOM -10.97%)
Q3 2022 Earnings Name
Nov 09, 2022, 5:00 p.m. ET

Contents:

  • Ready Remarks
  • Questions and Solutions
  • Name Individuals

Ready Remarks:

Mike Bishop

Howdy, everybody, and welcome to Atomera’s third quarter fiscal 12 months 2022 replace name. I might wish to remind everybody that this name and webinar are being recorded. [Operator instructions] I am Mike Bishop with the corporate’s investor relations. [Operator instructions] We are going to open with ready remarks from Scott Bibaud, Atomera’s president and CEO; and Frank Laurencio, Atomera’s CFO.

Then we are going to open the decision to questions. If you’re becoming a member of by phone, it’s possible you’ll comply with a slide presentation to accompany our remarks on the occasions and shows part of our investor relations web page of our web site. Earlier than we start, I wish to remind everybody that in in the present day’s name, we are going to make forward-looking statements. These forward-looking statements, whether or not in ready remarks or through the Q&A session, are topic to inherent dangers and uncertainties.

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These dangers and uncertainties are detailed within the Threat Elements part of our filings with the Securities and Alternate Fee, particularly on the corporate’s annual report filed on Type 10-Okay filed with the SEC on February 15, 2022 and in our prospectus complement filed with the SEC on Might 30 as outlined by SEC Regulation G. Reconciliations of those non-GAAP monetary measures to essentially the most straight comparable GAAP measures are included in in the present day’s press launch, which is posted on our web site. Now, I wish to flip the decision over to our president and CEO, Scott Bibaud. Go forward, Scott.

Scott BibaudPresident and Chief Government Officer

Good afternoon, and welcome to Atomera’s third quarter 2022 replace name. Heading towards the tip of the 12 months, we proceed to be impressed with the depth of the relationships and engagements with our clients and consider we’re transferring nearer to commercialization every quarter. The method takes time, however we’re seeing good traction. I’ll spotlight a few of our progress within the third quarter, then I will flip the decision over to Frank to undergo our financials.

First, although, I might like to deal with some trade traits and their influence on Atomera. Final quarter, I predicted the softening of demand within the semiconductor trade that is now taking part in out in earnings calls and analyst experiences. Forecast reductions appear to be broad-based, pushed by decrease demand and export management restrictions. Related to that, we’re seeing some reductions in projected capital expenditures, though I’d emphasize that it is a discount from the report ranges beforehand forecast by many firms.

What does this imply for Atomera? Traditionally, in durations like this, we have now seen a rise in growth exercise by our clients, leading to extra wafer runs and a rising curiosity from new clients as they see aggressive benefits popping out of the trade slowdown. This case doesn’t seem like an exception. We see robust and rising curiosity amongst our clients and introducing new specialty processes that may profit from MST. Capability is offered of their factories to get the work finished.

And allocation of capex budgets, though considerably decreased, remains to be plentiful to assist the acquisition of recent applied sciences and gear. Briefly, that is the kind of surroundings that gives a tailwind to adoption of Atomera expertise. As you’ll be able to see from our buyer pipeline, we proceed to work with a variety of shoppers, collectively representing at the least 50% of the world’s largest semiconductor makers. The stable progress we skilled in prior quarters has continued into the second half of this 12 months.

We preserve our give attention to driving clients to undertake MST, particularly, those that are furthest alongside of their growth. The semiconductor trade is understood to expertise the domino impact, the place as soon as a major trade participant adopts a brand new expertise, different gamers reply as quick followers. We’re inspired by the exercise amongst early adopters and are working with urgency to maneuver them towards manufacturing. On that be aware, I might wish to replace you on a few of our extra essential buyer progress.

Up to now, we have spoken about 2 JDA clients. Over the last quarter, the Atomera crew has been collaborating carefully with every of those clients to seek out MST options to real-world issues being skilled of their fabs. We have been making very robust progress. In every of their purposes, I consider we’re bringing new technical capabilities that weren’t doable to attain previous to their use of MST.

Though we’re restricted on what we will publicly disclose, let me guarantee you that we have been attaining the outcomes that we have now been hoping for since early this 12 months and at the moment are extra assured that our options will progress via the event course of towards quantity manufacturing. Likewise, we’re actively working with every of our 4 different licensees to advance plans we hope will finally result in additional stage of licenses after which on to commercialization. For some, we’re awaiting knowledge that may assist us put together for the subsequent steps. For others, we have now the proof that’s essential to shift from demonstrating MST advantages to planning for manufacturing.

As at all times, we are going to offer you information on any important milestones as they occur, topic to the confidentiality necessities of our buyer engagements. Specifically, when agreements are executed, we are going to disclose them in actual time, and a number of other of those are within the pipeline. Sadly, this course of may be frustratingly gradual. However given the constructive developments we have pushed, I consider it is solely a matter of time for MST to turn into broadly adopted.

Throughout this quarter, we proceed to see robust curiosity and plans by extra firms to undertake our two most mature and full MST options or merchandise, specifically these round MST-SP and MST for RFSOI. In each these areas, we now are satisfied of two essential issues. One is that the options we’re providing listed here are solely doable via using MST. Secondly, we now perceive the complicated mechanisms driving these options even higher than our clients, which supplies us a novel capability to not solely license our expertise however to satisfy our mission, which is to collaborate with clients to attain monetary profit for each firms.

MST expertise is particularly designed to assist clients shrink their die to place extra product on every wafer, which ends up in value reductions and better profitability. In occasions when capability is tight, this will not be the primary precedence of semiconductor makers. However once they go right into a slowdown like they’re and now, this turns into completely critically essential. I believe it is a honest query to ask why, if these applied sciences and our related financial profit are so compelling, it takes so lengthy to undertake.

After all, there are various solutions to this query, however two stand out. Most firms have some form of long-range product growth street map. Maybe they have been in manufacturing with Know-how A for 3 or extra years and it is time to work on an improve. Consequently, the engineering crew focuses on Know-how A for a interval.

So Know-how B and C should wait their flip even when they’ve recognized an actual breakthrough. Typically, after figuring out the breakthrough, they instantly add that growth plan to the subsequent 12 months’s growth efforts. So though they’re dedicated, work doesn’t start for a number of months. That is no reflection on the curiosity or anticipated return; is simply an instance of allocating scarce assets.

As soon as they do start, the event challenge time line can differ significantly, relying on how full the fab is. For the previous few years, throughput was extraordinarily gradual, however we count on it to speed up now. So, as I stated earlier, it is solely a matter of time. For example, we launched MST-SP to the market final 12 months, and although it generated quite a lot of curiosity, we’re in additional discussions about new buyer engagements now than we had been final 12 months.

And as soon as new packages get began, I count on growth to maneuver sooner than up to now. Within the press, you incessantly examine builders of essentially the most superior nodes and the way they’re experiencing delays resulting from yield issues, which stop manufacturability and excessive quantity. This is likely one of the principal explanation why it is taking longer to carry new notes to market, a phenomenon folks name the slowing of Moore’s Legislation. Atomera’s expertise is especially versatile to be used in these most superior architectures of next-generation transistors, that are known as gate-all-around transistors.

Over the last quarter, we have now seen proof of this in profitable experiments carried out on our instruments. A basic problem designers are attempting to take care of at these ultrasmall nodes is that their exact, extremely dope constructions are sitting solely angstroms away from different exact, extremely dope constructions, and they should maintain these boundaries in place via the entire manufacturing course of. However high-concentration dopants and nano-transistor constructions are inclined to diffuse when uncovered to the warmth required in subsequent manufacturing steps. And there are just a few mechanisms to stop that diffusion.

The trade has reacted by making an attempt to decrease the temperature of its manufacturing course of, however a specific amount of warmth remains to be obligatory, in order that they want extra methods to unravel the issue. Atomera’s MST is likely one of the best-known supplies for stopping dopant diffusion and a gate-all-around transistor, which means it may be used to stop, supply or drain dopants from diffusing into the channel and, thus, protect high-electron mobility. It might additionally assist stop punch-through between supply and drain within the silicon substrate. Even past dopant engineering, MST can be utilized to decrease contact resistance on the silicon metallic interface.

It might scale back high-k metallic gate stack peak, and eventually, it might probably enhance provider mobility and gate leakage by lowering high-k metallic gate intermixing. For a course of growth engineer, every of those MST advantages offers a definite instrument for getting gate-all-around expertise into manufacturing sooner and at a better yield. And implementation of MST within the manufacturing course of is simple as a result of epitaxial deposition is already used extensively for the method steps adjoining to the MST layers when constructing gate-all-around constructions. Lots of the concepts I’ve simply spoken about have turn into obvious via our crew’s R&D efforts this 12 months between progress with our clients, new rising alternatives and the rising experience of the Atomera crew in addressing crucial trade points.

I consider our progress this previous quarter is even higher than what we noticed within the first half of the 12 months. I want you might expertise the tempo of buyer and growth exercise inside Atomera. As I stated earlier than, this level within the trade cycle is right for our firm, and we’re doing every part in our energy to take benefit. Our crew is optimistic that these advances will quickly result in new buyer development and, much more importantly, licensing exercise that may take extra clients towards commercialization and can make Atomera a acknowledged semiconductor expertise chief within the trade.

Now let’s have Frank assessment our financials.

Frank LaurencioChief Monetary Officer

Thanks, Scott. On the shut of the market in the present day, we issued a press launch asserting our outcomes for the third quarter of 2022. This slide right here exhibits our abstract financials. Our GAAP web loss for the three months ended September 30, 2022 was $4.6 million, or $0.20 per share, up barely from our Q2 GAAP web lack of $4.5 million, which was additionally $0.20 per share.

In Q3 of 2021, GAAP web loss was $4.2 million, or $0.19 per share. GAAP working bills in Q3 2022 had been $4.7 million, a rise of roughly $210,000 over our $4.4 million of working expense in Q2. This improve was primarily resulting from a rise of roughly $310,000 in R&D bills, reflecting headcount development, offset partly by a $100,000 decline in G&A expense as authorized and different charges declined sequentially, whereas gross sales and advertising and marketing bills had been principally flat quarter over quarter. As in comparison with our Q3 2021, GAAP working bills final quarter elevated by $521,000, primarily on account of a $510,000 improve in R&D expense resulting from elevated engineering headcount, recruiting bills and better complete lease prices resulting from a full quarter of lease expense in Q3 2022 in comparison with solely a partial quarter in Q3 2021.

Non-GAAP web loss for the third quarter of 2022 was $3.7 million, in comparison with losses of $3.6 million in Q2 and $3.4 million in Q3 2021. The variations between GAAP and non-GAAP working bills and accordingly, between GAAP and non-GAAP web loss are virtually totally resulting from noncash inventory compensation bills. Our money steadiness at September 30, 2022 was $23.3 million, in comparison with $21.8 million on the finish of Q2, which is a rise of $1.5 million. Working money used throughout Q3 was $3 million.

And through the quarter, we introduced in roughly $4.6 million of money from financing, web of bills and commissions, reflecting gross sales beneath our at-the-market, or ATM, fairness program. Throughout the third quarter, we bought 386,415 shares at a median worth per share of roughly $12.34 beneath the ATM. As of September 30, 2022, we had 23.9 million shares excellent. Turning now to our outlook for the remainder of this 12 months and 2023.

By no means earlier than has Atomera been engaged throughout such a various array of purposes the place our clients want revolutionary breakthroughs like MST. Clearly, we like these engagements to supply near-term income. And when extra buyer wafer runs are required, licensing and go-to-market selections get pushed out. Accordingly, our information from income in This autumn is zero, and we’re not offering income steering past the present quarter, which is in keeping with our previous apply.

Our final replace name in July, I decreased our full 12 months steering for non-GAAP working bills to a variety of $14.75 million to $15.25 million. For the 9 months — the primary 9 months of this 12 months, our non-GAAP bills totaled $10.6 million. And since we have now good visibility via the tip of the 12 months, I count on our full 12 months working expense on a non-GAAP foundation shall be at or barely beneath the underside finish of that steering vary. On our subsequent earnings name, I will present extra particular shade on our deliberate 2023 spending.

With that, I will flip the decision again over to Scott for just a few abstract remarks earlier than we open the decision as much as questions. Scott?

Scott BibaudPresident and Chief Government Officer

Thanks, Frank. As anticipated, the robust momentum we constructed within the first half of this 12 months has given us a stable platform to construct on for the accomplishments of the second half, and we’re taking full benefit. Buyer visits and related progress and growth are accelerating. And with the dip in semiconductor backlog, firms have the capability and inclination to implement new options like MST so as to add capability, lower product value and obtain aggressive benefit.

Atomera is completely positioned on this surroundings with quite a lot of instruments to satisfy their wants. We proceed to consider that this mixture of our technical capabilities within the context of this market present an excellent surroundings so as to add to our license portfolio and to maneuver ahead to commercialization. And we look ahead to sharing information of these efforts with you sooner or later. Mike, we are going to now take questions.

Mike Bishop

Thanks, Scott. [Operator instructions] And now, our first query comes from Richard Shannon of Craig-Hallum. Richard, when you may kindly unmute and activate digicam, it’s possible you’ll start.

Richard ShannonCraig-Hallum Capital Group — Analyst

Thanks, Mike. And thanks, Scott and Frank, for having me. I apologize upfront right here for making an attempt to hear to 2 calls without delay right here. So you might have touched on a few of these matters right here.

However perhaps simply touching in your first JDA buyer. I believe you’ve got talked about being in central engineering and dealing with one enterprise unit. Have you ever expanded that past the primary enterprise items? Or — and if not, any visibility or work being finished to broaden that relationship?

Frank LaurencioChief Monetary Officer

Yeah, thanks for the query, Richard. So we aren’t actually speaking about increasing into completely different enterprise items. However what I can say, after we get to form of a license settlement, we’ll have the ability to say, we have definitively expanded with the enterprise unit, that is after we’ll have the ability to disclose it. However I can say, and in my ready remarks, I made just a few feedback concerning the work that we’re doing with JDA Buyer 1 and the breakthroughs that we have form of achieved on our R&D crew right here.

So clearly, we’re persevering with to work very carefully with them and persevering with to growth work that we consider positions us effectively to get to that sort of settlement sooner or later.

Richard ShannonCraig-Hallum Capital Group — Analyst

OK. Honest sufficient then. Scott, I believe you had some feedback, and once more, I most likely missed all — or missed a few of them, nevertheless it sounds such as you’re pretty excited concerning the surroundings right here that enables somewhat bit much less utilization and presents extra alternative to run extra R&D wafers. To what diploma are you seeing that? I imply, do you get a full view on what utilization clients have and to what diploma they’re prioritizing work with you versus different avenues they might have for these — the small variety of R&D wafers they run?

Scott BibaudPresident and Chief Government Officer

Yeah. I imply, we positively — with the shoppers that we have now which might be operating wafers that they are planning on doing extra wafers, it has been no downside, in anyway, to get new runs deliberate and began. For our newer clients, one of many challenges that we have had up to now is a buyer that was all in favour of working with us might say, hey, we expect your expertise has quite a lot of promise, however I am unable to get any wafers via the fab. And we have seen that concern go away.

So now, we have now quite a lot of new clients that we’re speaking about, and we expect we’ll have the ability to have interaction with them shortly. After which, lastly, typically even after we had wafers operating in fabs with of us up to now couple of years, has taken a really very long time to progress via simply because they’re absolutely utilized for revenue-bearing wafers. And so, we’re beginning to see that loosen up as effectively. Though I’d say, when analysts like your self are speaking concerning the slowdown in semiconductors, it is about bookings, proper? And it is about issues which might be going to occur sooner or later.

The slowdown in apply has not totally hit the factories but. So — however folks can see it coming.

Richard ShannonCraig-Hallum Capital Group — Analyst

OK. OK. Honest sufficient then. And I believe on the subject of vanguard, which had some good feedback, I believe I heard most of them there.

I assume, a few questions there. Clearly, there’s quite a lot of work that must be finished right here each in your finish, in addition to the trade work right here. To what diploma of confidence do you might have of not solely getting licensees for the form of gate-all-around expertise, but additionally intersecting with the introduction of these applied sciences to the market versus some updates they might have down the street? How do you concentrate on that?

Scott BibaudPresident and Chief Government Officer

Yeah, it is at all times a problem making an attempt to get on the practice on the proper level, so as to be there when it leaves the station. However I’ve talked about this on different applied sciences earlier than. The whole lot that we’re speaking about are additive applied sciences that may assist the gate-all-around processes and, even when they transfer to the method past that, it makes it simpler for them to fabricate and get increased efficiency out of these waivers. So even when they do not apply it to the primary spherical, they might apply it to a follow-on model of it to get increased yield or get higher efficiency.

In the event you have a look at TSMC’s 5-nanometer product portfolio, you’ll be able to see that they’d a complete bunch of variations of 5, proper? The primary model, the second model, the third model. And we consider that we will positively — if we do not intersect with the primary, we positively consider we’ll have the ability to intersect with the later ones. And now there’s solely three gamers which might be growing this sort of expertise. However the methods that we have developed for gate-all-around are additionally very relevant to among the extra superior work that is being finished by reminiscence gamers as effectively.

And so we’re very optimistic about it.

Richard ShannonCraig-Hallum Capital Group — Analyst

OK. Nice perspective there, Scott. Thanks. Perhaps a few fast questions for Frank.

If I missed this, my apologies, however did you replace the capex spend charge for this 12 months? Did you modify it? And would you might have us take into consideration a distinct charge for subsequent 12 months? It feels like there’s somewhat bit hiring plans or different work that may lead us to assume there’s one thing of a rise subsequent 12 months. And simply form of qualitatively, are you able to assist us take into consideration that?

Frank LaurencioChief Monetary Officer

Yeah. No. Glad to try this, Richard. So by way of for the remainder of the 12 months, I might give a band of $14.75 million to $15.25 million.

And on condition that we ended Q3 beneath — was that, yeah, $10.6 million via the primary three quarters of the 12 months, I might count on that we might are available in form of proper across the backside of that vary, so the underside finish being $14.75 million. I believe we’ll be at or beneath that. Directionally, we’re in the midst of our planning course of for subsequent 12 months. I would not count on there to be massive step capabilities.

However when you look again type of for the final 4 or 5 quarters and checked out type of the sequential development charge, I do not count on that we’d develop spending lower than that, however I am not ready to form of give any particular steering for subsequent 12 months. However I believe when you have a look at type of the traits quarter on quarter that we have seen all through this 12 months and carry that into subsequent 12 months, that is an affordable place to consider the place we’ll be.

OK. That is useful, Frank. And final query for me. On the feedback you had on the ATM, I caught the value per share common that you simply had there, however I missed the variety of shares that you simply took down there.

Yeah. So the variety of shares we bought final quarter was 386,415, and that is in our 10-Q additionally.

Richard ShannonCraig-Hallum Capital Group — Analyst

OK. Excellent. Thanks. That is all for me, you guys.

Thanks rather a lot.

Frank LaurencioChief Monetary Officer

Thanks.

Mike Bishop

Thanks, Richard. And our subsequent query comes from Cody Acree of Benchmark. Cody, when you would not thoughts turning in your digicam and unmuting.

Cody AcreeThe Benchmark Firm — Analyst

Yeah, thanks, guys. Thanks for taking my query. Perhaps, Scott, if I can begin off together with your Chinese language publicity. To what extent are you uncovered to the China market and people companions that will or will not be having any of the financial malaise that we’re seeing round the remainder of the trade?

Scott BibaudPresident and Chief Government Officer

Yeah, so thanks for the query, Cody. First, we have now been — for years, we had been hesitant to become involved in China too closely as a result of we simply had IP considerations. Afterward, we began to get engaged with China somewhat bit extra, however we — however then, we backed off through the Trump administration due to some indicators that we’re seeing popping out of Washington. So proper now, we do not actually have any important publicity to China.

I believe if this commerce struggle ever turns round, then we’d most likely go in and be searching for alternatives there. However proper now, I would not say it impacts us, in anyway. As a matter of truth, I’d say that the truth that there’s quite a lot of of us making an attempt to maneuver course of applied sciences into their very own form of home nation fabs provides us a possibility to assist these fabs differentiate by bringing our expertise in as they’re adopting.

Cody AcreeThe Benchmark Firm — Analyst

However you are not at present working with any companions in China.

Scott BibaudPresident and Chief Government Officer

That is proper.

Cody AcreeThe Benchmark Firm — Analyst

OK. OK. If I can simply get you to speak a bit concerning the macro once more. Simply the distinction within the buyer angle, because the belts are being tightened throughout the trade, I positively see the place the services being lesser used may very well be a possibility to maneuver you in.

However sooner or later, that pendulum goes up to now that then it is a buyer angle of restraints and tightening. You have been via a few of these cycles earlier than the place that may very well be a degree for you sooner or later sooner or later.

Scott BibaudPresident and Chief Government Officer

Yeah, that is a very good query. Initially, we’re very early in that pendulum swing, as you already know. So proper now, we’re actually within the candy spot. It is the place folks — one of many issues that is attention-grabbing is, this previous few years, the capability has been so skinny that growth exercise inside quite a lot of these firms was slowed down.

They had been actually targeted totally on find out how to enhance the yield to get extra wafers via a set capability fab, proper? So now, they’ve all this pent-up R&D that they are able to do. And I do not consider that we have seen a state of affairs up to now in our firm’s life the place the pendulum has swung up to now to the associated fee financial savings aspect that they don’t seem to be doing growth work. We — I believe it would not get — I do not assume it occurs. As soon as folks get to the purpose the place they are saying, hey, we actually want to save cash, they begin what can we do on our product prices or one thing to decrease our value, so we will drive extra profitability via the restricted manufacturing capability that we have now.

And that is a candy spot for us. So I actually assume if this slowdown lasts for some time, it should be nice for us, and actually assume it places us in a fantastic place.

Cody AcreeThe Benchmark Firm — Analyst

And your feedback round MST’s utility to gate-all-around may be very encouraging. However such as you stated, there is a restricted variety of gamers which might be growing that, and it is nonetheless very a lot in growth course of. So I assume, are you having lively discussions towards your implementation? Or is that extra of a — or was that extra of a commentary of thought in your half that we needs to be relevant right here and is sensible logically, however we’re not seeing it but extra companions?

Scott BibaudPresident and Chief Government Officer

Yeah, what I might say, Cody, is we positively are in touch with gamers which might be doing this sort of work. They find out about our expertise, and we have now completely different ranges of engagement, direct engagement with completely different guys there. However definitely, that is one thing that we’re consistently form of selling and one thing that we need to get extra deeply concerned with every of them on. I actually consider that in essentially the most bleeding edge, that is most likely the place you additionally see essentially the most NIH in firms, all one of the best engineers that the foundries need to work on this.

And so they could also be considerably hesitant to hunt outdoors assist like what we will carry, however there is not any denying, I imply, the feedback I made on the decision, there are at the least 5 and perhaps six completely different advantages we will carry. And every one in all them is separate. It is not like — I imply, you might select simply to implement one or you might implement all six. And so they’re not very arduous to implement as a result of like, for instance, we’re placing our expertise in an older course of node, we have to persuade folks so as to add epi and run epi on their manufacturing line.

It is not arduous to do, nevertheless it’s only a new piece of apparatus. However on essentially the most superior nodes, they’re utilizing epi in all places. And all they must do is add in some additional steps to place in MST after the prior piece of epi that they had been doing. So I believe we’re very optimistic about this.

If we get in on the bleeding edge, in fact, it can most likely be included in all future nodes which might be developed as effectively.

Cody AcreeThe Benchmark Firm — Analyst

And let’s have a look at, lastly, I assume, simply, Scott, your discussions on 2023 budgets to your clients. You have clearly been having these. You are getting some ideas on their broader capex plans. And I’d identical to to listen to your ideas on what had been your clients’ angle towards spending subsequent 12 months.

And are these — is that in sync together with your encouraging ideas?

Scott BibaudPresident and Chief Government Officer

Proper. Yeah.. So completely. Six months in the past, I believe, in my Q1 earnings name, I used to be speaking about principally each one in all our clients making report forecasts for what they had been going to do for capex spend greater than they’ve ever spent of their — within the firm’s historical past.

And now, a few of them have scaled again these forecasts. However you bought to think about that also means they’re spending way over they’d deliberate to spend two years in the past. So yeah, I believe I am very optimistic. I believe, they’ve loads of cash.

I imply, there — quite a lot of the fellows had been speaking about their R&D budgets are within the billions of {dollars}, working with us is just a few tens of millions of {dollars} of peanuts. And so this — I do not anticipate that we’ll see issues with cutbacks from clients due to value considerations, at the least within the subsequent 12 months to 18 months.

Cody AcreeThe Benchmark Firm — Analyst

OK. Nice. Thanks. After which, I am sorry, one last item.

I simply wished to speak about your visibility. And I do know that your normal has been to information towards zero in lack of sure deliverables. However we have been sitting right here at zero for the previous few quarters, so far as the Avenue estimates go. And I assume, I am questioning, is there a degree in your horizon that you might begin to consider getting extra constructive? Are there milestones or hurdles that you simply consider are coming that you simply may see 1 / 4 in 2023 the place you’ll be able to truly predict income? Or are we this case for the foreseeable time period?

Scott BibaudPresident and Chief Government Officer

No, truly, I share your frustration on that query, Cody. We — the problem — and I’ve at all times stated this in Section 3, the place we’re doing form of integration licenses, they’re very arduous to foretell. As soon as a buyer will get a producing license, then we get somewhat extra visibility into what they’re doing. And we do have what we consider are quite a few clients within the portfolio who’re — who may do a producing license quickly.

We’re at all times hesitant to say precisely when that may occur as a result of perhaps they do a wafer round that takes 9 months, and we hope it occurs proper after that, however they could want one other wafer run it can take 9 months extra. So — however I can say we have now a number of in our portfolio that we hope get there. As soon as they get via the manufacturing license after which we will get them into Section 5 distribution license, at that time, we will virtually begin to make actual income forecast not just for the license funds like upfront license charges but additionally for royalty funds down the street. So I am hopeful we get there quickly.

Undoubtedly, I’m uninterested in zero income forecast, and we might love to offer you greater than that.

Cody AcreeThe Benchmark Firm — Analyst

Certain. Certain. And Frank, one last item for you. Your ATM program, is there a variety of valuation estimates that you’ve your thumb on that — the place you consider that it is simply so low-cost you have to be shopping for extra aggressively and never for into the vary the place you may purchase much less?

Frank LaurencioChief Monetary Officer

I consider it is the alternative, proper? I imply, as a result of this — that will be type of a inventory buyback. I imply, you are considering extra by way of the vary of the place we’d promote within the ATM. And no, we do not follow type of ranges like that. I believe the common execution worth final quarter exhibits that we’re fairly even handed about utilizing this system.

However frankly, we have now rebalanced two issues, proper? One is sustaining enough money on our steadiness sheet to cowl our anticipated wants. After which, the second is making an attempt to execute at one of the best worth to be as — to have as little dilution as doable. I believe we have confirmed in utilizing ATM devices that we have executed effectively to these metrics. However I am unable to look ahead and say that there are type of absolute ranges as a result of it is simply going to rely on — a part of it inside our management, how are we executing? What are we delivering? What are our capital wants? However the one which I am unable to management is what is the broader fairness market doing.

As a result of I do assume that with out addressing our personal inventory worth, I imply, general, equities have been damage fairly badly within the final 12 months. So we’re not resistant to that, and we do not have a crystal ball as to when that may change. So there is not any arduous and quick formulation for that.

Cody AcreeThe Benchmark Firm — Analyst

OK. Nice. Nicely, thanks, Frank. Thanks, Scott.

Recognize it.

Scott BibaudPresident and Chief Government Officer

Thanks, Cody.

Mike Bishop

Thanks, Cody. And a few questions coming right here on the Q&A chat. Certainly one of them — there’s a few questions, Scott, on the wafer runs that we have talked about earlier than. And so, the query is, are you able to give some extra shade on the wafer runs that you have introduced or mentioned on prior convention calls?

Scott BibaudPresident and Chief Government Officer

Yeah. I believe on prior convention calls, what we stated was that we had quite a few completely different wafer runs underway. We’ve gotten some preliminary outcomes that regarded very promising. A few of these wafer runs have made to the tip, and sadly, a few of them have not but.

So, what I can let you know is that we have seen knowledge come out of these runs that we had been hoping to see at the start of this 12 months. And we — then there have been some — there are some technical challenges with one of many runs that don’t have anything to do with our expertise however might delay the outcomes additional. So I do not need to say what sort of choices the shoppers have made based mostly on these, however I can — I will simply say we’re persevering with to work with them. And we hope that what we’re doing will lead us to a subsequent era — I imply, a subsequent step, which might be license agreements within the close to future.

Mike Bishop

OK. And I do know we touched on it somewhat bit within the ready feedback, however there’s a few questions on updating on the standing of the JDA. So, perhaps tackle what issues are wanted to your JDAs to make it to manufacturing.

Scott BibaudPresident and Chief Government Officer

OK. I did make some feedback about our JDAs, I believe. On JDA No. 1, as we have spoken about up to now, so we’re — we had been working with the central engineering group, and we proceed to work with that buyer, varied teams who’ve requested us to have a look at another expertise that they actually need assistance fixing, and we have been engaged on that collectively with them.

I discussed in my ready remarks that we have seen actually compelling outcomes there. And — however we — and we’re speaking to a number of enterprise items. However we’ve not gotten to the purpose the place a enterprise unit has signed up and stated, OK, we’ll take a license and begin transferring ahead. That is one thing I can announce, and that is the purpose the place I can provide you — I imply, I will offer you at the least as a lot shade as I can there, however proper now, we’re not fairly at that time, so I am unable to say rather more about it.

The opposite JDA buyer we have now, we’re working straight with a enterprise unit. It falls within the class of a type of guys who had wafers within the fab, however we do not fairly have outcomes but, so I am unable to actually offer you a lot replace there both. However nonetheless working very carefully with them, and we hope to form of get to the purpose the place we will push into the license day quickly.

Mike Bishop

OK. And so, there is a query concerning the mental property. And the query is, how does your IP portfolio create a moat across the — the place the semiconductor trade is transferring?

Scott BibaudPresident and Chief Government Officer

Yeah. That is — that is truly a extremely good query. So our IP portfolio consists of — we have now greater than 300 patents granted and pending, they usually cowl — I like to think about it as a cloud. In the event you look inside every patent, there are dozens and dozens of claims in there, and every declare is one thing that protects us.

And so, what we attempt to do at any time when doable is we attempt to take basic MST functionality, and we attempt to construct patents round purposes, how folks would use that in sure areas. So for instance, in the present day, I talked somewhat bit about gate-all-around expertise, and we might have some patents that cowl MST and gate-all-around expertise. Now, for someone who wish to use MST, we have now such a cloud of protection round that expertise that they might be loopy to attempt to determine find out how to work across the cloud or discover a gap in it as a result of there’s simply too many intersecting form of traces that they must attempt to get round. And so, we consider we have now excellent protection not just for our core expertise but additionally for lots of the almost certainly future makes use of of it with ongoing patent purposes which might be application-specific.

Mike Bishop

OK. And remaining query right here. What has Atomera finished within the reminiscence sector?

Scott BibaudPresident and Chief Government Officer

Yeah. So most of our work within the reminiscence sector has been R&D work internally right here that’s focused towards wants that we all know the reminiscence market has. And the explanation why we all know what they’re is as a result of we’re working with reminiscence makers, and we’re consulting with them, and we’re looking for ways in which our expertise can resolve a few of their issues. I believe one of many areas that we’re significantly enthusiastic about and have been for a short while is in DRAM and our capability to make use of MST to make smaller stamps, that are — which make up about half the dimensions of an general reminiscence chip in the present day.

So if we may actually assist them shrink those who may save monumental quantities of energy and space and it will be very helpful. With the intention to have interaction with reminiscence firms on these issues, although, we have to do quite a lot of R&D work to get the precise knowledge to show our claims. So there’s three items we want in virtually any engagement with the shopper. We have to have a idea about why it will work.

We have to have some modeling. So Tecan modeling software program to point out folks precisely how it will be applied and the way it will work. After which, lastly, ideally, we’ll have some measured silicon outcomes that present the advantages that we’re promising to clients. And if we will do these three issues, we have now a really robust probability of participating with them and making an attempt to maneuver ahead.

In order that’s one of many key issues that we have now occurring within the reminiscence market. We’ve quite a few different concepts that we’re engaged on at somewhat bit extra within the background, however — in order that’s what is going on on.

Mike Bishop

OK. Thanks, Scott. And we’ll flip it again to you for closing feedback.

Scott BibaudPresident and Chief Government Officer

Proper. Nicely, I simply need to thank everybody for attending in the present day’s presentation. I am very happy to share with you our latest robust progress and to offer you a way of the optimism we’re experiencing inside Atomera. Please proceed to search for our information, articles and weblog posts to maintain you recent on our progress, which can be found, together with investor alerts, on our web site, atomera.com.

We look ahead to seeing a few of you throughout our scheduled advertising and marketing actions, together with the Benchmark Discovery convention. Ought to you might have extra questions, please contact Mike Bishop, who shall be completely satisfied to comply with up. Thanks once more to your assist. And we look ahead to our subsequent replace name.

Mike Bishop

[Operator signoff]

Length: 0 minutes

Name members:

Mike Bishop

Scott BibaudPresident and Chief Government Officer

Frank LaurencioChief Monetary Officer

Richard ShannonCraig-Hallum Capital Group — Analyst

Cody AcreeThe Benchmark Firm — Analyst

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