Q3 2022 Atomera Inc Earnings Call
And a replay will be available on <unk> IR web site for one year I'm, Mike Bishop with the company's Investor Relations.
As in prior quarters, we're using zoom and we will follow a similar format with participants in a listen only mode. We will open with prepared remarks from Scott <unk>, <unk>, President and CEO and Frank Lorenzo Adam Our CFO then we will open the call to questions. If you are joining by telephone you may follow a slide presentation to accompany our remarks on the intense.
And presentations section of our Investor Relations page of our website.
Before we begin I would like to remind everyone that during today's call. We will make forward looking statements. These forward looking statements whether in prepared remarks or during the Q&A session are subject to inherent risks and uncertainties.
These risks and uncertainties are detailed in the risk factors section of our filings with the Securities and Exchange Commission specifically on the company's annual report filed on Form 10-K filed with the SEC on February 15, 2022, and in our prospectus supplement filed with the SEC on May 31 2022.
Except as otherwise required by federal Securities laws, <unk> disclaims any obligation to update or make revisions to such forward looking statements contained herein or elsewhere to.
Reflect changes in expectations with regards to those events conditions and circumstances.
Also please note that during this call we will be discussing non-GAAP financial measures as defined by SEC regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press releases, which is posted on our website.
Now I would like to turn the call over to our President and CEO Scott Vivo go ahead Scott.
Okay.
Good afternoon, and welcome to <unk> third quarter 2022 update call.
Heading towards the end of the year, we continue to be impressed with the depth of the relationships and engagements with our customers and believe we are moving closer to commercialization each quarter quarter process.
Process takes time, but we are seeing good traction I will highlight some of our progress in the third quarter, then I will turn the call over to Frank to go through our financials.
First, though I'd like to address some industry trends and their impact on Adam era last quarter I predicted the softening of demand in the semiconductor industry that is now playing out in earnings calls and analysts' reports.
Forecast reduction seem to be broad based driven by lower demand and export control restrictions associated with that we are seeing some reductions in projected capital expenditures, although I would emphasize that this is a reduction from the record levels previously forecast by many companies.
What does that mean for Adam era.
Historically in periods like this we have seen an increase in development activity by our customers, resulting in additional wafer runs.
And a growing interest from new customers as they seek competitive advantages coming out of the industry slowdown.
This case does not appear to be an exception, we see strong and growing interest among our customers and introducing new specialty processes that can benefit from MST.
<unk> is available in their factories to get the work done in allocation of Capex budgets, although somewhat reduced is still plentiful to support the acquisition of new technologies and equipment.
In short this is the type of environment that provides a tailwind to adoption of <unk> technology.
As you can see from our customer pipeline, we continue to work with a wide range of customers together.
Representing at least 50% of the world's largest semiconductor makers the solid progress we experienced in prior quarters has continued into the second half of this year.
We maintain our focus on driving customers to adopt MST in particular, those who are furthest along in their development.
The semiconductor industry is known to experience the Domino effect, where once the significant industry participant adopts a new technology other players respond as fast followers.
We're encouraged by the activity among early adopters and are working with urgency to move them towards production.
On that note I'd like to update you on some of our more important customer progress.
In the past, we have spoken about to JD customers.
During the last quarter. The <unk> team has been collaborating closely with each of these customers defined MSP solutions to real world problems being experienced in their fabs.
We've been making very strong progress in each of their applications. I believe we are bringing new technical capabilities. There are not possible to achieve prior to their use of MSP.
Although we are restricted on what we can publicly disclose let me assure you that we've been achieving the results that we had been hoping for since early this year and are now more assured that our solutions will progress through the development process toward volume production.
Likewise, we are actively working with each of our four other licensees to advance plans. We hope will ultimately lead to further stage of licenses and then onto commercialization.
For some we are awaiting data that will help us prepare for the next steps for others. We have the proof that is necessary to shift from demonstrating MST benefits to planning for production.
As always we will provide you with news on any significant milestones as they happen subject to the confidentiality requirements of our customer engagements in particular when agreements are executed we will disclose them at in real time and several of these are in the pipeline.
Unfortunately.
This process process can be frustratingly slow.
But given the positive developments, we've driven I believe it's only a matter of time for MST to become widely adopted.
During this quarter, we continued to see strong interest in plans by more companies to adopt our two most mature and complete MSC solutions, our products, namely those around MST SP and MSP for RF Soi and both of those areas. We now are convinced of two important things.
One is that the solutions, we are offering here are only possible through the use of MST.
<unk>.
We now understand the complex mechanisms driving these solutions, even better than our customers, which gives us a unique ability to not only license our technology.
But to meet our mission, which is to collaborate with customers to achieve financial benefit for both companies.
MST technology is specifically designed to help customers shrink their die to put more product on each wafer, which leads to cost reductions and higher profitability.
In times when capacity is tight this may not be the first priority of semiconductor makers.
But when they go into a slowdown like there and now this becomes absolutely critically important.
I think it's a fair question to ask why if these technologies and their associated economic benefit are so compelling.
Take so long to adopt.
Of course, there are many answers to this question but to standout.
Most companies have some kind of long range product development roadmap, perhaps they've been in production with technology for three or more years and it's time to work on an upgraded consequently their engineering team focuses on technology for a period.
So technology B and C will have to wait their turn even if they have identified a real breakthrough.
Generally after identifying the big breakthrough they immediately add that development plan to the next years.
Development efforts.
So, though although theyre committed work does not begin for several months. This has no reflection on the interest are expected return. It's just an example of allocating scarce resources.
Once they do begin the development project timeline can vary greatly depending on how full the fabulous for the last few years throughput was extremely slow, but we expect it to accelerate now.
So as I said earlier, it's only a matter of time as an example, we introduced MST SP to the market last year, and even though it generated a lot of interest.
We are in more discussions about new customer engagements now than we were last year and once new programs get started I expect development to move faster than in the past.
In the press you frequently read about developers are the most advanced nodes.
And how they are experiencing delays due to yield problems with prevent manufacture ability and high volume.
This is one of the principal reasons, why it's taking longer to bring new notes to market a phenomenon people call the slowing of Moore's law.
<unk> technology is particularly versatile for use in these most advanced architectures of next generation transistors.
Which are called gate all around transistors.
During the last quarter, we have seen evidence of this in successful experiments conducted on our tools.
A fundamental challenge designers are trying to deal with at these ultra small nodes is that their precise.
Nice highly structures are sitting only angstroms away from other precise highly don't structures and they need to keep these boundaries in place through the whole manufacturing process.
But high concentration dopants and nano transistor structures tend to diffuse when exposed to the heat required and subsequent manufacturing steps and there are a few mechanisms to prevent that diffusion.
The industry has reacted by trying to lower the temperature or its manufacturing process, but a certain amount of heat is still necessary. So they need more techniques to solve the problem.
Adam Aron MST is one of the best known materials for preventing dopant diffusion and have gained around all around transistor that means it can be used to prevent source are drained dopants from diffusing into the channel and thus preserve high electric mobility.
It can also help prevent punched through between source and drain in the silicon substrate.
Even beyond Dopant engineering, MST can be used to lower contact resistance at the silicon metal interface. It can reduce high K metal gate stack height, and finally, it can improve carry on mobility and gate leakage by reducing high K metal gate intermixing.
For our process development engineer each of these MST benefits provides a distinct tool for getting gate, all around technology into production faster and at a higher yield.
Implementation of MST and the manufacturing process is straightforward because epitaxial deposition is already used extensively for the process steps adjacent to the MST layers when building gate all around structures.
Many of the ideas I've just spoken about have become apparent through our team's R&D efforts. This year between progress with our customers' new emerging opportunities and the increasing expertise of the <unk> team and addressing critical industry issues I believe our progress this past quarter is even greater.
And what we saw in the first half of the year.
I wish you could experience the pace of customer and development activity inside Adam era, as I said before this point in the industry cycle is ideal for our company.
And we are doing everything in our power to take advantage or.
Our team is optimistic that these advances will soon lead to new customer growth and even more importantly licensing activity that will take more customers towards commercialization and will make Adam era are recognized semiconductor technology leader in the industry.
Now, let's have Frank review our financials.
Okay.
Thank you Scott.
At the close of the market today, we issued a press release announcing our results for the third quarter of 2022.
This slide here shows our summary financials.
Our GAAP net loss for the three months ended September 32022 was $4 6 million or <unk> 20 per share.
Up slightly from our Q2 GAAP net loss of $4 5 million, which was also 20 per share.
In Q3 of 2021 gap.
GAAP net loss was $4 $2 million or <unk> 19 per share.
GAAP operating expenses in Q3, 2022 were $4 7 million and.
An increase of approximately $210000 over a $4 4 million of operating expense in Q2.
This increase was primarily due to an increase of approximately $310000 R&D expenses, reflecting head count growth.
Offset partly by a $100000 decline in G&A expense as legal and other fees declined sequentially.
While sales and marketing expenses were basically flat quarter over quarter.
As compared to our Q3 2021.
GAAP operating expenses last quarter increased by $521000, primarily as a result of a $510000 increase in R&D expense due to increased engineering headcount recruiting expenses and higher total lease costs due to a full quarter of lease expense in Q3.
<unk> 22, compared to only a partial quarter in Q3 2021.
non-GAAP net loss for the third quarter of 2022 was $3 7 million compared.
Compared to losses.
Of $3 $6 million in Q2, and $3 4 million in Q3 2021.
The differences between GAAP and non-GAAP operating expenses expenses and accordingly between GAAP and non-GAAP net loss are almost entirely due to noncash stock compensation expenses.
Our cash balance at September 32022 was $23 3 million compared to $21 8 million at the end of Q2, which is an increase of $1 5 million.
Operating cash used during Q3 was $3 million and during the quarter, we brought in approximately $4 $6 million of cash.
Cash from financing net of expenses and commissions, reflecting sales under our aftermarket or ATM equity program.
During the third quarter, we sold 386415 shares at an average price per share of approximately $12 34.
The ATM.
As of September 32022, we had $23 9 million shares outstanding.
Turning now to our outlook for the rest of this year of 2023 never before has that American engaged across such a diverse array of applications, where our customers need innovative breakthroughs like MST.
Obviously, we like these engagements to offer near term revenue.
One additional customer wafer runs the required licensing and go to market decisions getting pushed out.
Accordingly.
Our guide for revenue in Q4 is zero and we are in.
Not providing revenue guidance beyond the current quarter.
Which is consistent with our past practice.
Our last update call in July .
I reduced our full year guidance for non-GAAP operating expenses to a range of $14 75 to $15 $25 million.
For the nine months.
The first nine months of this year, our non-GAAP expenses totaled $10 6 million.
And because we have good visibility through the end of the year I expect our full year operating expense on a non-GAAP basis will be at or slightly below the bottom end of that guidance range.
On our next earnings call I will provide more specific color on our planned 2023 spending.
With that I'll turn the call back over to Scott for a few summary remarks before we open the call up to questions.
Scott.
Thanks Frank.
As expected the strong momentum we built in the first half of this year has given us a solid platform to build on the accomplishments of the second half and we are taking full advantage.
Customer visits and associated progress in development are accelerating and.
And with a dip in semiconductor backlog companies have the capacity and inclination to implement new solutions like MSP to add capacity cut product cost and achieve competitive advantage.
<unk> is perfectly positioned in this environment with a variety of tools to meet their needs.
We continue to believe that this combination of our technical capabilities in the context of this market provide an ideal environment to add to our licensed portfolio and to move forward to commercialization and we look forward to sharing news of those efforts with you in the future Mike We will now take questions.
Scott.
If you wish to ask a question. Please click the Q&A button at the bottom of the zoom window, then feel free to type in your question I will do my best to aggregate the incoming queries and relay them to management. Alternatively, you can click the raise hand button and we may call on you to ask your question lies.
Alright, and now our first question comes from Richard Shannon of Craig Hallum, Richard If you could kindly on mute Internet camera you may begin.
Thanks, Mike and thanks, Scott and Frank for having me.
I apologize in advance you for trying to listen to calls at once here. So you may have touched on some of these topics here, but.
Maybe just touching on your first GTA customer I think you've talked about being in the central engineering and working with one business unit have you expanded that beyond the first business units or and if not just any visibility or work being done to expand that relationship.
Yeah. Thanks for the question Richard.
So we.
We aren't really talking about expanding into.
Different business units.
But what I can say.
When when we get to.
Kind of a license agreement will be able to say definitively expanded with us that's won't be able to disclose it but I can say in my prepared remarks, I made a few comments about the work that we're doing with J D. A customer one in the breakthroughs that we've kind of achieved on our R&D team here. So obviously, we are continuing to work very closely with them.
Continuing to development work that we believe positions us.
Well to get to that type of agreement in the future.
Okay fair enough.
Scott I think you had some comments and again I, probably missed missed all or miss some of them but.
It sounds like Youre fairly excited about the environment here.
It allows us a little bit less utilization and corporates more opportunity. If you run more R&D wafers to what degree are you to what degree are you seeing that.
Did you get a full view on what utilization customers, having and to what degree they're prioritizing work with you versus other avenues. They may have for those.
The small number of R&D wafers eight run.
Yeah, I mean, we definitely with the customers that we have that are running wafers that they're planning to do additional wafers.
It's been no problem whatsoever to get new brands planned and started.
<unk>.
For our newer customers one of the challenges that we've had in the past is the customer that was interested in working with US may say, Hey, we think your technology is a lot of promise, but I can't get any wafers through the path and we've seen that concern go away. So now we have a lot of new customers that we're talking about and we think we'll be able to.
Engage with them quickly and then <unk>.
Finally, sometimes even when we had wafers running in Fabs with folks in the past couple of years has taken a very long time to progress through just because they've you know theyre fully utilized for revenue bearing wafers.
So we're starting to see that loosen up as well, although I would say.
You know.
When analysts like yourself are talking about the slowdown in semiconductors.
About bookings right and it's about things, they're going to happen in the future of the slowdown in practice is not entirely hit the factories yet so.
But people can see it coming.
Okay, Okay fair enough.
Anything on the topic of leading edge, which had some nice comments I heard I think I heard most of them there.
Just a couple of questions there.
Obviously, there's a lot of work that needs to be done here both in urine.
As well as industry worked here.
To what degree of confidence you have of not only.
Are you getting licensees for the kind of gate all around technology and also intersecting with the introduction of those technologies to the market versus some updates they may have down the road how do you think right now.
Yeah.
It's always a challenge trying to get on the train at the right point so that.
It can be there when it when it leaves the station.
But.
I've talked about this on other technologies before everything that we're talking about are additive technologies that will help.
The gate all around processes and even.
If they move to the process beyond that.
Makes it easier for them to manufacture and get higher performance out of those wafers. So even if they don't use it on the first round and they use it on a follow on version of it to get higher yields are to better performance. If you look at TSMC.
Tsmc's.
Five nanometer product portfolio, you can see that they had a whole bunch of variations of five right.
First version in the second version of the third version and we believe that we can definitely we don't have dissected. The first we definitely believe we'll be able to intersect the later ones.
And now there's only three players that are developing this type of technology, but the techniques that we've developed for gate. All around are also very applicable to some of the more advanced work, that's being done by memory players as well.
And so we're very optimistic about it.
Okay, Great perspective, there Scott thanks.
Maybe a couple of quick questions for Frank.
If I missed this my apologies, but did you update the capex spend rate for this year due to change it and would you have us thinking about a different rate for next year. It sounds like theres little hiring plans or other work that.
Might lead us to think there is something of an increase next year just kind of qualitatively can you help us think about that yeah.
Happy to do that Richard so.
In terms of for the rest of the year I had given a band of 14, 75% to $15 two five and given that we ended Q3.
Under.
Is that.
Yes, $10 6 million through the first three quarters of the year.
I'd expect that we'd come in kind of right around the bottom of that.
That range. So the bottom end being $14 75, I think we will we will be at or below that.
Directionally.
We're in the middle of our planning process for next year.
I wouldn't expect there to be big step functions.
But if you look back sort of.
For the last four or five quarters and looked at sort of the sequential growth rate.
I don't expect that we would grow spending less than that but.
But I'm not prepared to kind of give any specific guidance for next year, but I think if you look at sort of the trends quarter on quarter that.
But we've seen throughout this year.
And carry that into next year, that's a reasonable place to two.
To think about what it will be okay. That's helpful shrink and last question from me on the comments you had on the ATM and of course, the price per share average that you have there, but I missed the number of shares that you are you took down there.
Yeah. So the.
The number of shares we sold.
Last quarter was 386415 and that's in our 10-Q also.
Okay perfect. Thank you that's all for me guys. Thanks, a lot.
Thanks Richard.
Our next question comes from Cody Acree of benchmark Jodi, if you wouldn't mind Cameron a meeting.
Yeah. Thanks, guys. Thanks for taking my question.
Maybe Scott if I can start off with your Chinese exposure.
To what extent are you exposed to the China market and those partners.
That may or may not be having any of the economic malaise that we're seeing around the rest of the industry.
Yeah. So.
Thanks for the question Cody.
First.
We.
We have been.
For years, we were hesitant to get involved in China too heavily because we just had IP concerns.
Later on we started to get engaged with with.
With China, a little bit more but we but then we backed off during the Trump administration because of some.
Some signals that we're seeing coming out of Washington So.
Right now we don't really have any significant exposure to China I think if this.
If this trade war ever turns around then we would probably go in and be looking for opportunities there, but right now I wouldn't say it impacts us whatsoever.
As a matter of fact, I would say that the the fact that there's a lot of folks trying to move process technologies into their own kind of domestic country.
Fabs gives us an opportunity to help those fabs differentiate by bringing our technology and as their as they are adopting.
But you are not currently working with any partners in China. So.
That's correct okay.
Okay.
If I can just get you to talk a bit about the macro again.
Just the difference in the customer attitude as the belts are being tightened across the industry I definitely see where.
The facilities being lesser use could be an opportunity to move the win but at some point that pendulum goes so far that then it's a customer attitude.
Restraints and tightening.
You've been through some of these cycles before.
That could be a point for you at some point in the future.
Yeah.
That's a good question first of all we're very early in that pendulum swing as you know so right now we're really in the sweet spot, it's where people one of the things. That's interesting is this past few years.
The capacity has been so thin.
That development activity inside a lot of these companies was slowed down they were really focused mostly on how to improve the yields or get more.
More wafers through a fixed capacity fab right. So now they have all this pent up R&D that they're ready to do.
Uh huh.
I don't believe that we've seen a situation so far in our company's life, where the pendulum has swung so far to the cost savings side, but they arent doing development work.
I think it doesn't get.
It doesn't I don't think it happens once people get to the point, where they say hey, we really need to save money. They start looking at what can we what can we do on our product cost or something to lower our costs. So we can drive more profitability through the limited.
Manufacturing capacity that we have and thats.
Sweet spot for us so I really think if.
This slowdown lasts for a while it's going to be great for us and really think it puts us in a great position.
And your comments around the MSP is application to gate all around is very encouraging but like you said Theres limited number of players that are developing that and it is still very much in the development process.
I guess are you having active discussions toward your implementation or is that more of a was that more of a commentary of thought on your part that we should be applicable here makes sense logically, but we're not seeing it yet more partners.
Say Cody is we definitely are in contact with the with the players that are that are doing this type of work.
They know about our technology.
And we have different levels of engagement direct engagement with with different guidance, there, but certainly that's something that we are constantly kind of.
Promoting and something that we want to get more deeply involved with each of them on I really believe that.
In the most bleeding edge.
That's probably where you also see the most NIH and companies all of the best Engineers that are at the foundries want to work on this.
And they may be somewhat hesitant to seek outside help like what we can bring but there's no denying.
The comments I made on the call there are at least five maybe six different benefits. We can bring in each one of them separate not like I mean, you can choose just to.
One are you could implement all six.
And they're not very hard to implement because.
Like let's say, we were putting our technology in the older process node, we need to convince people to add ft and run F beyond there.
And their production line, that's not hard to do but it is just a new piece of equipment, but on the most advanced nodes, they're using effie everywhere and all they would have to do is add in some extra steps to put in MSC. After the prior piece of that would be that they were doing so I.
I think we're very optimistic about this if we get in at the bleeding edge of course would probably be included in all future nodes that are developed as well.
And let's see lastly, I guess just Scott your discussions on 2023 budgets for your customers you have obviously been having those getting some thoughts on their broader capex plans.
And I would just like to hear your thoughts on your.
Your customers' attitude towards spending next year and are those is that in sync with your encouraging thoughts alright, yeah. So absolutely.
You know.
Six months ago, I think in my Q1 earnings call I was talking about.
Basically every one of our customers, making record forecast for what Theyre going to do for Capex spend more than they've ever spent in there in the company's history.
And.
Now some of them have scaled back those forecasts, but you got to imagine that still means theyre spending far more than they had planned to spend two years ago. So yeah, I think I'm very optimistic I think we have plenty of money.
A lot of the guys we're talking about there their.
R&D.
Budgets are in the billions of dollars working with US as few millions of dollars of peanuts, and so I don't anticipate that we're going to see.
<unk> cutbacks from customers because of cost concerns at least at least in the next.
Year to 18 months.
Okay, great. Thanks, and then I'm sorry, one last thing.
Just wanted to talk about your visibility.
And I know that your standard has been to guide towards zero in lack of certain deliverables.
But we've been sitting here at zero for the last few quarters.
I'm sorry.
As far as the Street estimates go.
And I.
I guess I'm wondering.
Is there a point on your horizon.
Could start to think about getting more people are there are there milestones or hurdles that you believe are coming.
You might see a quarter in 2023, where you can actually predict revenue.
Are we looking at this situation for the foreseeable term.
No.
Actually I share your frustration on that question Cody.
We.
The challenge and I've always said this in phase three where we're doing kind of integration licenses, they're very hard to predict once a customer gets a manufacturing license then we get a little more visibility into what they what they are doing and we do have what we believe our number of customers in the portfolio, who are who could do a manufacture.
<unk> license soon.
Always hesitant to say exactly when that will happen because maybe they do a wafer around it takes nine months and we hope it happens right after that but they might be another way for round that will take nine months more so but I can say we have several in our portfolio that we hope to get there once they get through the manufacturing license and then we can get them into phase five distribution license.
At that point, we can almost start to make real revenue forecast not only for licensed payments like upfront license fees, but also for our royalty payments down the road. So I'm hopeful we get there soon definitely I am.
Tired of zero revenue forecasts and we'd love to give you more than that sure sure.
And Frank one last thing for you.
Your ATM program.
Is there a range of valuation estimates that you have you done more in where you believe that it's just so cheap you've got to be borrowing more aggressively.
The upper end of the range, where you might buy less.
I think think of it's the opposite right I mean, because this rapid.
That would be sort of a stock buyback I mean, youre thinking more in terms of range of where we would sell.
And the ATM.
And no we don't we don't stick to sort of ranges like that I think the average execution price.
Last quarter shows that we're pretty judicious about using the program, but frankly.
We balanced two things right one is maintaining sufficient cash on our balance sheet.
<unk>.
To cover our anticipated needs and then the second one is trying to execute at the best price to be.
Uh huh.
We have as little dilution as possible I think we've proven and using ATM instruments that we've executed well.
So those metrics, but.
I can't look forward and say that there are sort of absolute ranges because it's just going to depend on.
Part of it within our control how are we executing.
What are we delivering.
What are our capital needs, but the one that I can't control is.
What's the broader equity markets going because I do think that.
No.
Without addressing our own stock price I mean overall.
Yes.
Equities have been hurt pretty badly in the last year. So we're not immune to that and we don't have a crystal ball as to when that will change.
So there's no there's no hard and fast.
Formula for that.
Okay, great well, thank you Scott.
Great.
Thank you Cody Thank you Cody.
And some questions coming here on the Q&A.
Chad.
One of them there is a couple of questions Scott.
The wafer runs that we've talked about before.
And so the question is can you give some more color on the wafer runs that you've announced or discussed on prior conference calls.
Yeah, I think on prior conference calls what we said was that we had a number of different wafer runs underway. We've gotten some we have gotten some preliminary results that looked very promising.
Some of those wafer runs have.
<unk>.
To the end and unfortunately, some of them haven't yet.
So.
What I can tell you is that we we've seen data come out of those runs that we were hoping to see at the beginning of this year.
And.
Then there were some you know what.
There are some technical challenges with one of the runs that have nothing to do with our technology, but may delay the results further.
So I don't want to say what type of decisions that customers have made based on those but I can I'll just say, we're continuing to work with them and we hope.
That that what we're doing will lead us to next.
Our next generation next step, which would be license agreements in the near future.
Okay, and I know, we touched on that a little bit in the prepared comments, but theres a couple of questions about updating on the status of the JV. So maybe address what things are needed for your <unk> to make it to production.
Okay.
I did make some comments about about.
J D I think.
On J D and number one as we've spoken about in the past.
So we had been working with the Central Engineering organization, and we continue to work with that customer.
Various groups who've asked us to look at some other technologies that they really need help solving that we'd been working on that jointly with them.
I mentioned in my prepared remarks that we've seen really compelling results there.
And but we.
And we're talking about the <unk> business units, but we haven't we haven't gotten to the point, where a business unit has signed up and said, okay. We're going to take a license and start moving forward, that's something I can announce.
And that's the point, where I can give you I mean.
You at least as much color as I can there, but right now we're not quite at that point, So I can't say much more about it.
The other J D a customer we have.
We're working directly with the business unit.
It falls in the category of one of those guys who had wafers in the fab, but we don't quite have results yet so I can't really give you much update there either but.
But still working very closely with them and we hope to kind of get to the point, where we can push into the license stage soon.
Okay.
And so there is a question about the intellectual property and the question is how does your IP portfolio portfolio create a moat around the where the semiconductor industry is moving.
Yeah. This is that's actually a really good question. So are our IP portfolio is composed of.
You know, we have more than 300 patents granted and pending.
And they cover I like to think of it as a cloud if you look inside each patent there are dozens.
Dozens and dozens of claims in there and each claim is something that protects us.
And.
So what we try to do whenever possible as we try to take fundamental MFC capability and we try to build patents around applications. How people will use that in in certain areas. So so for example, today I talked a little bit about gate all around technology.
And we may have some patents that cover MFC and gate all around technology now.
For somebody who would like to use the MST.
We are such a cloud of coverage around that technology that they would be crazy to try to figure out how to work around the cloud or or find a whole limit because.
There's just too many <unk>.
Intersecting kind of lines that they would have to try to get around and so we believe we have very good coverage not only for our.
Our core technology, but also a lot of the most likely future uses of it with ongoing.
Patent applications that are application specific.
Okay and final question here.
What has <unk> done in the memory sector.
Yeah. So.
Most of our work in the memory sector has been R&D work internally here that is targeted towards.
Towards needs that we know that the memory market has.
And the reason why we know what they are is because we were working with memory makers and we're consulting with them and we're trying to find ways that our technology can solve some of their problems.
I think one of the.
One of the areas that we're particularly excited about and have been for a little while is in DRAM and our ability to use MSP to make smaller sense, Sam which are.
<unk> make up about half the size of an overall memory chip today. So if we could really help them shrink those that could save enormous amounts of power and area and it would be very valuable.
In order to engage with memory companies on those things, though we need to do a lot of R&D work to get the actual data to prove.
Our claims so there's three pieces, we need in almost any engagement of the customer and we need to have a theory about why it wouldnt work, we need to have some modeling so tea CAD modeling software to show people exactly how it would be implemented and how it would work and then finally ideally will have some measured silica.
<unk> results show the benefits that we're promising to customers and if we can do those three things we were very strong chance of engaging with them and trying to move forward. So that's.
One of the key areas things that we have going on in the memory market. We have a number of other ideas that we're working on it.
A little bit more in the background, but so that's what's going on.
Okay. Thanks, Scott and I will turn it back to you for closing comments.
All right.
Well I just wanted to thank everyone for attending today's presentation I'm very pleased to share with you. Our recent strong progress and to give you a sense of the optimism we're experiencing inside Adam era.
Please continue to look for our news articles and blog posts to keep you up to date on our progress which are available along with investor alerts on our website at <unk> Dot Com, we look forward to seeing some of you during our scheduled marketing activities, including the benchmark Discovery conference.
Should you have additional questions. Please contact Mike Bishop who will be happy to follow up. Thank you again for your support and we look forward to our next update call.
Thank you everyone. This concludes at Amira third quarter 'twenty two conference call.