SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 12, 2018
(Exact name of registrant as specified in its charter)
|(State or Other Jurisdiction||(Commission File||(I.R.S. Employer|
|of Incorporation)||Number)||Identification Number)|
750 University Avenue, Suite 280
Los Gatos, California 95032
(Address of principal executive offices) (zip code)
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 8.01 Other Events
On March 12, 2018, Atomera Incorporated distributed an investor presentation on its website, www.atomera.com. The investor presentation is attached hereto as Exhibit 99.1.
The information in this Current Report, including the exhibit attached hereto, is furnished pursuant to Item 8.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|March 12, 2018||By:||/s/ Frank Laurencio|
|Chief Financial Officer|
Investor Presentation March 2018 NASDAQ: ATOM 1
2 Note Regarding Forward - Looking Statements This presentation contains forward - looking statements concerning Atomera Incorporated (““ Atomera ,” the “Company,” “we,” “us,” and “our”). The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward - looking statements. These forward - looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section of our Annual Report on Form 10 - K for the year ended December 31, 2017 filed with the SEC on March 6, 2018 (the “2017 Annual Report”). In light of these risks, uncertainties and assumptions, the forward - looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in our forward - looking statements. You should not rely upon forward - looking statements as predictions of future events. Although we believe that the expectations reflected in our forward - looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward - looking statements will be achieved or occur. This presentation contains only basic information concerning Atomera . The Company’s filings with the Securities Exchange Commission, including the 2017 Annual Report, include more information about factors that could affect the Company’s operating and financial results. We assume no obligation to update information contained in this presentation. Although this presentation may remain available on the Company's website or elsewhere, its continued availability does not indicate that we are reaffirming or confirming any of the information contained herein.
3 Investment Overview Mears Silicon Technology (MST®) is a semiconductor enhancement technology Improves electron mobility resulting in higher performance, lower power, and lower costs Capital - light IP licensing business Highly leverageable business model with strong cash position Robust and growing patent portfolio to support licensing activities Core R&D complete after $80M and 15 years Currently engaged with 50% of world’s top semiconductor makers Total available market: $4.0 B Strong team to commercialize technology CEO ran $1B+ divisions at Broadcom and Altera Founder/CTO co - invented the erbium - doped fiber amplifier NASDAQ Ticker: “ATOM” – IPO in August 2016
Cost ($B) The skyrocketing cost of new nodes 4 Extending Moore’s Law MST can deliver a half to a full node of benefits Extends life of depreciated fabs Continues reducing the cost per transistor May solve problems in geometries smaller than 28 nm MST cost is tiny in comparison to developing a new node Process development/licensing is ~$10M Foundry equipment upgrades cost is ~$30 - 50M A foundry for a new node costs billions MST: A way out Source: McKinsey & Co, “On Semiconductors” “From an economic standpoint, Moore’s law is over.” Silicon Valley analyst Lynley Gwynnap , quoted in “After Moore’s Law,” The Economist , 12 March 2016 Cost per Million Gates (cents) FinFET 0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8 90nm 65nm 40nm 28nm 20nm Fab Investment Process Development Cost Per Transistor 2004 2006 2008 2010 2012
5 MST Technology Potential Benefits • Improved Efficiency • Improved performance • Lower power consumption • Some combination of the two • Reduced Die Size • Lower power needs • Lower bottom line cost • Improved Yield • Less waste • Easier design parameters
6 Potential Benefits • Overall Improved Efficiency : Smartphone • 45% - 52% added battery life (depending on usage) • Increased cost to add MST expected to be insignificant to total phone cost • Opportunity to increase performance instead of saving power • Reduced Die Size : Power Management Integrated Circuit (IC) • Die size reduction of 15 - 21% • Would result in lower power draw • Would also reduce total cost per device • Product Enablement : Mobile Double Data Rate (DDR) Memory • Could create a whole new class of memory for mobile devices • Would enable low - power wearables and Internet - of - Things devices • May provide significant improvements to standby power Sources: Smartphone power consumption papers (Carrol & Geisser ) 3 rd party consultant simulations Atomera analysis
7 Semiconductor Ecosystem Process Development Wafer Fabrication Chip Makers / Sellers Equipment Manufacturers Foundries Integrated Device Manufacturers (IDM) Vertically Integrated Firms Supporting Ecosystem Semiconductor Equipment Manufacturers Electronic Design Automation Tools Fabless
1 2 Faster Results Readily Available 3 Simulation Confidence 8 Accelerating time to license Customer Wafer Manufacturing Atomera MST® Deposition Customer MST® Deposition Phase3 Integration Phase4 Installation Phase 5 Qualification Phase 6 Production Phase 1 Planning Phase 2 Setup 20+ learning cycles per year EPI tool availability allows for uninterrupted customer progress Reduces time and cost for customer process integration
9 Largest Companies with fabs Total industry capacity 17.8M wafers/month Top 25 wafer capacity leaders 89% of total industry capacity at end of 2016 Company Type Market Segment Total Capacity - Wf/mon. (200mm equ) 1 Samsung Semiconductor IDM Memory 2,598,750 2 TSMC Foundry Logic 2,012,317 3 Micron Technology IDM Memory 1,540,500 4 SK Hynix Foundry Memory 1,530,000 5 Toshiba Semiconductor IDM Memory 1,158,750 6 GlobalFoundries Foundry Logic 810,000 7 Intel IDM MCU 681,750 8 Texas Instruments (TI) IDM Analog 620,879 9 UMC (United Microelectronics) Foundry Logic 614,863 10 STMicroelectronics IDM Analog 461,006 11 SMIC Foundry Logic 432,750 12 Infineon Technologies IDM Analog 375,809 13 ON Semiconductor IDM Analog 374,492 14 Powerchip Technology Foundry Logic 313,000 15 TowerJazz Foundry Analog 297,735 16 NXP Semiconductors IDM Analog 250,000 17 Renesas Electronics IDM Other 236,124 18 Japan Semiconductor Corp. (Toshiba) Foundry Analog 229,944 19 Huahong Grace Semiconductor (HHGrace) Foundry Analog 213,000 20 IM Flash IDM Memory 180,000 21 Vanguard International Semiconductor (VIS) Foundry Analog 175,000 22 MagnaChip Semiconductor Foundry Analog 155,000 23 Nanya Technology IDM Memory 135,000 24 Fujitsu Semiconductor IDM Logic 131,728 25 China Resources Microelectronics (CR Micro) IDM Analog 130,846 Source: IC Insights Global Wafer Capacity 2017 - 2021 report
10 Atomera Business Opportunity Example 1. Worldwide Average Fab 1 Monthly Fab Capacity (wafers/month) 40,000 Wafer ASP $1,637 Annual Revenue Potential 2 $7.9M Example 2. Leading Foundry, 40nm Fab Monthly Fab Capacity (wafers/month) 80,000 Wafer ASP $3,000 Annual Revenue Potential 2 $28.8M 1. 2016: 375 fabs worldwide with a total of 15.2M wafers per month 2. Assumes 50% penetration Sources: IC Insights Royalties License Fees Engineering Service Fees
11 Leading Analog Mainstream Leading Planar 3D Analog, PMIC, RF IoT , RF, Automotive DRAM; Digital Processors FinFET , Nanowire Big Players: TSMC, TI, NXP, ST Micro Challenges Difficult to find new options for cost, performance, power improvements Atomera solutions MST can lower die cost while improving other parameters Big Players: TSMC, UMC, SMIC, Global Foundries Challenges Many fully depreciated factories need a performance boost to remain competitive Atomera solutions MST allows fab life extension by upping performance within node Big Players: TSMC, GF, Samsung, Hynix, Micron Challenges Alternatives to planar transistors are both expensive and can affect product performance Atomera solutions MST provides a low cost alternative to extend planar life Big Players: Intel, TSMC, Samsung, GF Challenges FinFET cost, variability, manufacturability. Looking at exotic material solutions Atomera solutions MST is a low risk, silicon based technology with multiple benefits 180nm 130nm 90nm 65nm 40nm 28nm 16nm 14nm 10nm 7nm 5nm Market Segment Strategy Now engaged with customers in all four segments
Patent Portfolio 29 20 7 5 61 Issued US Patents MST CMOS Devices MST Core Method and Devices MST Optics Other • Strong Patent Portfolio • Covers core elements of MST • Constantly adding new patents • Discoverable and enforceable • Infringement can be easily discovered using electron microscopy • International Strategy • Including foreign counterparts, portfolio has over 110 granted patents 22 New US Patents Applications Filed in 2017 12
Financials * For a full reconciliation of GAAP and non - GAAP results, please see our press release issued February 13, 2018. 13 2016 FY 2017 FY 2016 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q2 2016 GAAP Results Revenue $0.1M - $0.1M - - - - Gross Profit $0.1M - $0.1M - - - - Operating Expense ($13.3M) ($10.0M) ($2.7M) ($3.3M) ($3.7M) ($3.6M) ($1.9M) Net Loss ($13.1M) ($12.6M) ($2.6M) ($3.3M) ($3.6M) ($3.5M) ($2.6M) Loss Per Share ($1.08) ($2.22) ($0.21) ($0.27) ($0.30) ($0.29) ($1.61) Reconciliation between GAAP & Non-GAAP* Net Loss (GAAP) ($13.1M) ($12.6M) ($2.6M) ($3.3M) ($3.6M) ($3.5M) ($2.6M) Interest Expense - $2.6M Stock-Based Compensation $4.0M $2.5M ($0.5M) ($0.9M) ($1.4M) ($1.2M) ($0.1M) Adjusted EBITDA (Non-GAAP)* ($9.1M) ($7.5M) ($2.1M) ($2.4M) ($2.2M) ($2.4M) ($1.8M) Cash at December 31, 2017 $17.4M Shares Outstanding at December 31, 2017 12.2M 2017
14 Summary High margin, recurring revenue financial model Well funded with strong cash position Solid progress with initial customers in pipeline Strong technology and patent position Experienced management team to execute business plan
What’s New March 2018 15
16 What’s new – March 2018 Achieved first engineering service revenue of $110K in Q4 Now engaged with 14 customers, 6/2/6 in the three phases Working with customers in unexpected ways Skipping directly into phase 3 Considering licensing after phase one Installation prior to license execution Installation of MST in a factory has commenced with one customer Under evaluation license terms TCAD modeling revolutionizing customer evaluations/integration
17 Customer Pipeline 0 2 4 6 8 10 12 14 IPO 3Q 16 4Q 16 1Q 17 2Q17 3Q17 Q417 Quarterly Customer Pipeline Growth Phase 1 Phase 2 Phase 3 Now engaged with 50% of the world’s top semiconductor makers* * 10 of the top 20 (IC Insights, McClean Report 2017)
18 Customer Engagement Changes Customer Wafer Manufacturing Atomera MST® Deposition Customer MST® Deposition Phase3 Integration Phase4 Installation Phase 5 Qualification Phase 6 Production Phase 1 Planning Phase 2 Setup Royalties License License?
7 19 Early Installation Advantages Significantly lowers cost of processing test wafers Speeds throughput by avoiding shipping/contamination/calibration time Improves capacity – both for Epi tools and our engineers Raises our stature within Epi OEMs Customer Epi engineers become an internal advocate for multiple process nodes Customer Wafer Manufacturing Atomera MST® Deposition Customer MST® Deposition Phase 3 Integration Phase 3+ Installation Phase 4 Qualification Phase 5 Production Phase 1 Planning Phase 2 Setup
20 TCAD Modelling Advantage TCAD allows customers simulate MST quickly and inexpensively Engages customers earlier to understand how to use MST Benefits Best integration techniques Frequently causes more ownership on customer side Builds early credibility and desire to experiment Early license discussions Horizontal buy - in at customer Without MST With MST Measured Results Simulated Results
Financials * For a full reconciliation of GAAP and non - GAAP results, please see our press release issued February 13, 2018. 21 2016 FY 2017 FY 2016 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q2 2016 GAAP Results Revenue $0.1M - $0.1M - - - - Gross Profit $0.1M - $0.1M - - - - Operating Expense ($13.3M) ($10.0M) ($2.7M) ($3.3M) ($3.7M) ($3.6M) ($1.9M) Net Loss ($13.1M) ($12.6M) ($2.6M) ($3.3M) ($3.6M) ($3.5M) ($2.6M) Loss Per Share ($1.08) ($2.22) ($0.21) ($0.27) ($0.30) ($0.29) ($1.61) Reconciliation between GAAP & Non-GAAP* Net Loss (GAAP) ($13.1M) ($12.6M) ($2.6M) ($3.3M) ($3.6M) ($3.5M) ($2.6M) Interest Expense - $2.6M Stock-Based Compensation $4.0M $2.5M ($0.5M) ($0.9M) ($1.4M) ($1.2M) ($0.1M) Adjusted EBITDA (Non-GAAP)* ($9.1M) ($7.5M) ($2.1M) ($2.4M) ($2.2M) ($2.4M) ($1.8M) Cash at December 31, 2017 $17.4M Shares Outstanding at December 31, 2017 12.2M 2017
NASDAQ: ATOM 22