we use words such as “ anticipate , ” “ estimate , ” “ plan , ” “ project , ” “ continuing , ” “ ongoing , ” “ expect , ” “ believe , ” “ intend , ” “ may , ” “ will , ” “ should , ” “ could , ” and similar expressions to identify forward-looking statements . all forward-looking statements included in this report are based on information available to us on the date hereof and , except as required by law , we assume no obligation to update any such forward-looking statements . overview we are engaged in the business of developing , commercializing and licensing proprietary processes and technologies for the $ 350+ billion semiconductor industry . our lead technology , named mears silicon technology tm , or mst ® , is a thin film of reengineered silicon , typically 100 to 300 angstroms ( or approximately 20 to 60 silicon atomic unit cells ) thick . mst ® can be applied as a transistor channel enhancement to cmos-type transistors , the most widely used transistor type in the semiconductor industry . mst ® is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry . we believe that by incorporating mst ® , transistors can be smaller , with increased speed , reliability and energy efficiency . in addition , since mst ® is an additive and low cost technology , it can be deployed on an industrial scale , with machines commonly used in semiconductor manufacturing . we believe that mst ® can be widely incorporated into the most common types of semiconductor products , including analog , logic , optical and memory integrated circuits . we do not intend to design or manufacture integrated circuits directly . instead , we intend to develop and license technologies and processes that will offer the designers and manufacturers of integrated circuits a low-cost solution to the industry need for greater performance and lower power consumption . our customers and partners are expected to include : · foundries , which manufacture integrated circuits on behalf of fabless manufacturers ; · integrated device manufacturers , or idms , which are the fully integrated designers and manufacturers of integrated circuits ; · fabless semiconductor manufacturers , which are designers of integrated circuits who outsource the manufacture of their chips to foundries ; · original equipment manufacturers , or oems , that manufacture the epitaxial , or epi , machines used to deposit semiconductor layers , such as the mst ® onto the base silicon wafer ; and · electronic design automation companies , which make tools used throughout the industry to simulate performance of semiconductor products using different materials , design structures and process technologies . we intend to generate revenue through licensing arrangements whereby foundries and idms pay us a license fee for their use of mst ® technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer or device that incorporates our mst ® technology . we also intend to enter into licensing arrangements with fabless semiconductor manufacturers pursuant to which we will charge them a royalty for each device they sell that incorporates our mst ® technology . we were organized as a delaware limited liability company under the name nanovis llc on november 26 , 2001. on march 13 , 2007 , we converted to a delaware corporation under the name mears technologies , inc. on january 12 , 2016 , we changed our name to atomera incorporated . on march 17 , 2015 , we completed the private placement of $ 14.75 million in senior secured convertible promissory notes , which we issued for cash consideration of $ 7.40 million and the exchange for previously issued promissory notes that at the time of exchange had principal and accrued interest in the aggregate amount of $ 7.35 million . on april 1 , 2016 we completed the private placement of an additional $ 5.96 million in senior secured convertible notes on the same terms as the promissory notes placed in march 2015. we refer to these promissory notes in this annual report as our “ secured notes . ” during october 2015 , we conducted a recapitalization of our outstanding options and warrants to purchase shares of our common stock . pursuant to the recapitalization , we offered all holders of our options and warrants as of december 31 , 2014 a one-time opportunity to exchange their options and warrants for shares of our common stock at a ratio of two options or warrants for one share of common stock regardless of exercise price . the offer resulted in 166,230 options and 601,861 warrants converting to a total of 384,045 shares of common stock . in connection with the recapitalization , we incurred a one-time non-cash charge of approximately $ 2.09 million in the fourth quarter of 2015 relating to our loss on the exchange of the options and warrants for the common stock . on december 11 , 2015 , we effected a 1-for-15 reverse stock split of our common stock . all historical share amounts and share price information presented in this report have been proportionally adjusted to reflect the impact of this reverse stock split . 17 on august 10 , 2016 , we closed our initial public offering of 3,680,000 share of common stock at a public offering price of $ 7.50 per share . the common stock included 480,000 shares sold as a result of the underwriter 's exercise in full of its overallotment option . story_separator_special_tag gross proceeds to us from this offering were $ 27,600,000 before deducting underwriting discounts , commissions and other offering expenses . in accordance with the terms of the secured notes , all principal plus accrued interest ( totaling approximately $ 23.5 million ) converted automatically upon consummation of the ipo into 6,264,659 million shares of common stock . results of operations for the years ended december 31 , 2016 and 2015 revenues . we have not commenced revenue-producing operations . operating expenses . operating expenses consist of research and development , general and administrative , and selling and marketing expenses . for the years ended december 31 , 2016 and 2015 our operating expenses totaled approximately $ 10.0 million and $ 5.5 million , respectively . research and development expense . to date , our operations have focused on the research , development , patent protection , and commercialization of our processes and technologies , including our proprietary and patent-protected mst ® performance enhancement technology . our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication and metrology of semiconductor wafers incorporating our mst ® technology . the timing and amount of our outsourced fabrication and metrology is highly dependent on evaluations by our prospective customers and partners . as a result , the level of our research and development costs can vary significantly among accounting periods . for the years ended december 31 , 2016 and 2015 , we incurred approximately $ 4.0 million and $ 2.0 million , respectively , of research and development expense , an increase of approximately $ 2.0 million or 97 % . the increase in research and development expense is primarily due to an increase of approximately $ 939,000 in spending on outsourced fabrication and metrology to support increased engagements with potential customers evaluating our mst ® and an increase of approximately $ 783,000 in payroll expense reflecting an increase in engineering headcount and accrual of bonus expenses under a program implemented during 2016. we expect that engineering headcount in 2017 will remain at or above the level of 2016. general and administrative expense . general and administrative expenses consist primarily of payroll and benefit costs for administrative personnel , office-related costs and professional fees . general and administrative costs for the years ended december 2016 and 2015 were approximately $ 5.1 million and $ 3.4 million , respectively , representing an increase of approximately $ 1.7 million or 48 % . the increase in costs was primarily due to an increase of $ 2.8 million in compensation expense ( including an increase of $ 1.6 million in stock compensation expense ) resulting from the hiring of our chief executive officer in october 2015 and our chief financial officer in february 2016 , severance payments totaling approximately $ 208,000 to three employees in connection with moving our headquarters to california in 2016 , our commencement of compensation in both cash and equity of our non-employee directors after the ipo , payment of an ipo incentive bonus to our chief executive officer in the amount of $ 250,000 , accrual of approximately $ 429,000 in bonus expense in 2016 and approximately $ 1.4 million of equity compensation expense resulting from awards of restricted stock to certain directors and officers upon completion of the ipo . these increases were offset in part by a $ 1.5 million decrease in professional fees , reflecting a charge of approximately $ 1.0 million to general and administrative expense for the fair value of a warrant issued for strategic consulting services in 2015 , as well as the move of our former chief executive officer to the role of executive vice president of strategic business development and a $ 249,000 decrease in legal and accounting expense related to our recapitalization in 2015 whereas in 2016 the legal and accounting expenses related to our ipo were capitalized and offset against additional paid-in capital upon closing the offering . we anticipate that general and administrative expense in 2017 will increase from the 2016 level . selling and marketing expense . selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel and business development consulting services . selling and marketing expenses for the years ended december 31 , 2016 and 2015 were approximately $ 901,000 and $ 36,000 , respectively . the increase of approximately $ 865,000 was primarily due to our former chief executive officer moving to the role of executive vice president of business development effective january 1 , 2016. of this $ 865,000 increase , approximately $ 418,000 consisted of increased stock compensation expense , primarily reflecting the grant of restricted stock to our executive vice president of business development as part of our ipo bonus and approximately $ 336,000 consisted of increased payroll expense resulting from the move of this executive from the role of ceo . due to increased engagement with potential customers , we expect selling and marketing expense in 2017 to increase from 2016 . 18 interest income and expense . interest income and interest expense for the periods indicated , consisted of the following ( in thousands ) : replace_table_token_3_th interest expense consists of interest accrued on our secured notes and the fair value of a warrant issued to the placement agent for our offering of the secured notes . we made no interest payments in the periods presented . the increase in interest expense in the year ended december 31 , 2016 compared to the year ended december 31 , 2015 was due to our issuance of approximately $ 5.96 million in principal amount of secured notes on april 1 , 2016. the warrant we issued to the placement agent in our offering of secured notes provided that the number of shares issuable upon exercise of the warrant would be adjusted and the exercise price of that warrant would be adjusted to equal the conversion price

liquidity and capital resources as of december 2016 , we had total assets of approximately $ 26.9 million and a working capital of approximately $ 25.8 million . on august 10 , 2016 we consummated our ipo of 3,680,000 shares of common stock through which we raised net proceeds of approximately $ 24.7 million . in connection with the completion of the ipo , our secured notes were converted into 6,264,659 shares of common stock , thus extinguishing the debt associated with the secured notes . cash flows from operating , investing and financing activities : we believe that our available working capital is sufficient to fund our presently forecasted working capital requirements for , at least , the next 12 months following the date of the filing of this report , including securing one or more foundries , idms or fabless semiconductor manufacturers to qualify and license our mst ® technology and start full-scale industrial production of a device that incorporates our mst® technology . however , the semiconductor industry is generally slow to adopt new manufacturing process technologies and conducts long testing and qualification processes which we have limited ability to control . accordingly , we may require additional capital in order to get to full-scale industrial production of a device that incorporates our mst ® .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources as of december 2016 , we had total assets of approximately $ 26.9 million and a working capital of approximately $ 25.8 million . on august 10 , 2016 we consummated our ipo of 3,680,000 shares of common stock through which we raised net proceeds of approximately $ 24.7 million . in connection with the completion of the ipo , our secured notes were converted into 6,264,659 shares of common stock , thus extinguishing the debt associated with the secured notes . cash flows from operating , investing and financing activities : we believe that our available working capital is sufficient to fund our presently forecasted working capital requirements for , at least , the next 12 months following the date of the filing of this report , including securing one or more foundries , idms or fabless semiconductor manufacturers to qualify and license our mst ® technology and start full-scale industrial production of a device that incorporates our mst® technology . however , the semiconductor industry is generally slow to adopt new manufacturing process technologies and conducts long testing and qualification processes which we have limited ability to control . accordingly , we may require additional capital in order to get to full-scale industrial production of a device that incorporates our mst ® .
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 Suspicious Activity Report : we use words such as “ anticipate , ” “ estimate , ” “ plan , ” “ project , ” “ continuing , ” “ ongoing , ” “ expect , ” “ believe , ” “ intend , ” “ may , ” “ will , ” “ should , ” “ could , ” and similar expressions to identify forward-looking statements . all forward-looking statements included in this report are based on information available to us on the date hereof and , except as required by law , we assume no obligation to update any such forward-looking statements . overview we are engaged in the business of developing , commercializing and licensing proprietary processes and technologies for the $ 350+ billion semiconductor industry . our lead technology , named mears silicon technology tm , or mst ® , is a thin film of reengineered silicon , typically 100 to 300 angstroms ( or approximately 20 to 60 silicon atomic unit cells ) thick . mst ® can be applied as a transistor channel enhancement to cmos-type transistors , the most widely used transistor type in the semiconductor industry . mst ® is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry . we believe that by incorporating mst ® , transistors can be smaller , with increased speed , reliability and energy efficiency . in addition , since mst ® is an additive and low cost technology , it can be deployed on an industrial scale , with machines commonly used in semiconductor manufacturing . we believe that mst ® can be widely incorporated into the most common types of semiconductor products , including analog , logic , optical and memory integrated circuits . we do not intend to design or manufacture integrated circuits directly . instead , we intend to develop and license technologies and processes that will offer the designers and manufacturers of integrated circuits a low-cost solution to the industry need for greater performance and lower power consumption . our customers and partners are expected to include : · foundries , which manufacture integrated circuits on behalf of fabless manufacturers ; · integrated device manufacturers , or idms , which are the fully integrated designers and manufacturers of integrated circuits ; · fabless semiconductor manufacturers , which are designers of integrated circuits who outsource the manufacture of their chips to foundries ; · original equipment manufacturers , or oems , that manufacture the epitaxial , or epi , machines used to deposit semiconductor layers , such as the mst ® onto the base silicon wafer ; and · electronic design automation companies , which make tools used throughout the industry to simulate performance of semiconductor products using different materials , design structures and process technologies . we intend to generate revenue through licensing arrangements whereby foundries and idms pay us a license fee for their use of mst ® technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer or device that incorporates our mst ® technology . we also intend to enter into licensing arrangements with fabless semiconductor manufacturers pursuant to which we will charge them a royalty for each device they sell that incorporates our mst ® technology . we were organized as a delaware limited liability company under the name nanovis llc on november 26 , 2001. on march 13 , 2007 , we converted to a delaware corporation under the name mears technologies , inc. on january 12 , 2016 , we changed our name to atomera incorporated . on march 17 , 2015 , we completed the private placement of $ 14.75 million in senior secured convertible promissory notes , which we issued for cash consideration of $ 7.40 million and the exchange for previously issued promissory notes that at the time of exchange had principal and accrued interest in the aggregate amount of $ 7.35 million . on april 1 , 2016 we completed the private placement of an additional $ 5.96 million in senior secured convertible notes on the same terms as the promissory notes placed in march 2015. we refer to these promissory notes in this annual report as our “ secured notes . ” during october 2015 , we conducted a recapitalization of our outstanding options and warrants to purchase shares of our common stock . pursuant to the recapitalization , we offered all holders of our options and warrants as of december 31 , 2014 a one-time opportunity to exchange their options and warrants for shares of our common stock at a ratio of two options or warrants for one share of common stock regardless of exercise price . the offer resulted in 166,230 options and 601,861 warrants converting to a total of 384,045 shares of common stock . in connection with the recapitalization , we incurred a one-time non-cash charge of approximately $ 2.09 million in the fourth quarter of 2015 relating to our loss on the exchange of the options and warrants for the common stock . on december 11 , 2015 , we effected a 1-for-15 reverse stock split of our common stock . all historical share amounts and share price information presented in this report have been proportionally adjusted to reflect the impact of this reverse stock split . 17 on august 10 , 2016 , we closed our initial public offering of 3,680,000 share of common stock at a public offering price of $ 7.50 per share . the common stock included 480,000 shares sold as a result of the underwriter 's exercise in full of its overallotment option . story_separator_special_tag gross proceeds to us from this offering were $ 27,600,000 before deducting underwriting discounts , commissions and other offering expenses . in accordance with the terms of the secured notes , all principal plus accrued interest ( totaling approximately $ 23.5 million ) converted automatically upon consummation of the ipo into 6,264,659 million shares of common stock . results of operations for the years ended december 31 , 2016 and 2015 revenues . we have not commenced revenue-producing operations . operating expenses . operating expenses consist of research and development , general and administrative , and selling and marketing expenses . for the years ended december 31 , 2016 and 2015 our operating expenses totaled approximately $ 10.0 million and $ 5.5 million , respectively . research and development expense . to date , our operations have focused on the research , development , patent protection , and commercialization of our processes and technologies , including our proprietary and patent-protected mst ® performance enhancement technology . our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication and metrology of semiconductor wafers incorporating our mst ® technology . the timing and amount of our outsourced fabrication and metrology is highly dependent on evaluations by our prospective customers and partners . as a result , the level of our research and development costs can vary significantly among accounting periods . for the years ended december 31 , 2016 and 2015 , we incurred approximately $ 4.0 million and $ 2.0 million , respectively , of research and development expense , an increase of approximately $ 2.0 million or 97 % . the increase in research and development expense is primarily due to an increase of approximately $ 939,000 in spending on outsourced fabrication and metrology to support increased engagements with potential customers evaluating our mst ® and an increase of approximately $ 783,000 in payroll expense reflecting an increase in engineering headcount and accrual of bonus expenses under a program implemented during 2016. we expect that engineering headcount in 2017 will remain at or above the level of 2016. general and administrative expense . general and administrative expenses consist primarily of payroll and benefit costs for administrative personnel , office-related costs and professional fees . general and administrative costs for the years ended december 2016 and 2015 were approximately $ 5.1 million and $ 3.4 million , respectively , representing an increase of approximately $ 1.7 million or 48 % . the increase in costs was primarily due to an increase of $ 2.8 million in compensation expense ( including an increase of $ 1.6 million in stock compensation expense ) resulting from the hiring of our chief executive officer in october 2015 and our chief financial officer in february 2016 , severance payments totaling approximately $ 208,000 to three employees in connection with moving our headquarters to california in 2016 , our commencement of compensation in both cash and equity of our non-employee directors after the ipo , payment of an ipo incentive bonus to our chief executive officer in the amount of $ 250,000 , accrual of approximately $ 429,000 in bonus expense in 2016 and approximately $ 1.4 million of equity compensation expense resulting from awards of restricted stock to certain directors and officers upon completion of the ipo . these increases were offset in part by a $ 1.5 million decrease in professional fees , reflecting a charge of approximately $ 1.0 million to general and administrative expense for the fair value of a warrant issued for strategic consulting services in 2015 , as well as the move of our former chief executive officer to the role of executive vice president of strategic business development and a $ 249,000 decrease in legal and accounting expense related to our recapitalization in 2015 whereas in 2016 the legal and accounting expenses related to our ipo were capitalized and offset against additional paid-in capital upon closing the offering . we anticipate that general and administrative expense in 2017 will increase from the 2016 level . selling and marketing expense . selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel and business development consulting services . selling and marketing expenses for the years ended december 31 , 2016 and 2015 were approximately $ 901,000 and $ 36,000 , respectively . the increase of approximately $ 865,000 was primarily due to our former chief executive officer moving to the role of executive vice president of business development effective january 1 , 2016. of this $ 865,000 increase , approximately $ 418,000 consisted of increased stock compensation expense , primarily reflecting the grant of restricted stock to our executive vice president of business development as part of our ipo bonus and approximately $ 336,000 consisted of increased payroll expense resulting from the move of this executive from the role of ceo . due to increased engagement with potential customers , we expect selling and marketing expense in 2017 to increase from 2016 . 18 interest income and expense . interest income and interest expense for the periods indicated , consisted of the following ( in thousands ) : replace_table_token_3_th interest expense consists of interest accrued on our secured notes and the fair value of a warrant issued to the placement agent for our offering of the secured notes . we made no interest payments in the periods presented . the increase in interest expense in the year ended december 31 , 2016 compared to the year ended december 31 , 2015 was due to our issuance of approximately $ 5.96 million in principal amount of secured notes on april 1 , 2016. the warrant we issued to the placement agent in our offering of secured notes provided that the number of shares issuable upon exercise of the warrant would be adjusted and the exercise price of that warrant would be adjusted to equal the conversion price

